Enbridge to Sell its Interests in Alliance Pipeline and Aux Sable to Pembina for $3.1 Billion

Enbridge Inc. ("Enbridge") (TSX: ENB) (NYSE: ENB) recently announced that it has entered into a definitive agreement to sell its 50.0% interest in Alliance Pipeline ("Alliance") and its 42.7% interest in Aux Sable to Pembina Pipeline Corporation ("Pembina") (PPL: TSX) (NYSE: PBA) for a purchase price of $3.1 billion, including non-recourse debt at Alliance of approximately $0.3 billion, and subject to customary closing adjustments.

Alliance delivers liquids rich natural gas sourced in Northeast B.C., Northwest Alberta, and the Bakken region to Chicago. Aux Sable operates NGL extraction and fractionation facilities in both Canada and the U.S., with extraction rights on Alliance, offering connectivity to key U.S. NGL hubs.

The sale price represents an attractive valuation of approximately 11 times projected 2024 EBITDA for Alliance and approximately 7 times for Aux Sable, which is in line with other commodity exposed businesses.

"We are pleased to continue our strong track record of surfacing value for shareholders through an ongoing capital recycling program. With this divestiture, we will have raised ~$14 billion since 2018 at attractive valuations," said Pat Murray, EVP and Chief Financial Officer. "Today's transaction reinforces our disciplined approach to capital allocation. We remain committed to optimizing our portfolio, enhancing our industry leading cash flow profile by reducing commodity price exposure, bolstering our financial flexibility, and maintaining a strong balance sheet."

As part of the transaction, Pembina, a long-standing partner on Alliance and the current operator of Aux Sable, will also assume operatorship of Alliance. Enbridge will work closely with Pembina to ensure a safe and orderly transition.

"The Alliance and Aux Sable system has been a reliable and profitable asset for Enbridge for many years. We would like to thank our high-quality team for their commitment to safety and reliability," said Cynthia Hansen, EVP and President, Gas Transmission and Midstream. 

The divestiture represents an important element of Enbridge's financing plan. The sales proceeds will fund a portion of the strategic U.S. gas utilities acquisitions ("the Acquisitions") and be used for debt reduction. Any remaining Acquisitions funding will be satisfied through utilizing any, or all, of the following financing programs available to Enbridge including our ongoing capital recycling program, issuance of further hybrid securities and bonds, reinstatement of our DRIP Program, or at-the-market equity issuances.   

The effective date of the transaction is January 1, 2024, with closing expected to occur in the first half of 2024, subject to the receipt of regulatory approvals and customary closing conditions. Enbridge's 2024 financial guidance and near-term growth outlook through 2025 remain unchanged as a result of this announcement.

National Bank Financial and Scotiabank acted as financial advisors and Torys LLP as legal advisor to Enbridge on the transaction.

About Enbridge Inc.

At Enbridge, we safely connect millions of people to the energy they rely on every day, fueling quality of life through our North American natural gas, oil and renewable power networks and our growing European offshore wind portfolio. We're investing in modern energy delivery infrastructure to sustain access to secure, affordable energy and building on more than a century of operating conventional energy infrastructure and two decades of experience in renewable power. We're advancing new technologies including hydrogen, renewable natural gas, carbon capture and storage and are committed to achieving net zero greenhouse gas emissions by 2050. Headquartered in Calgary, Alberta, Enbridge's common shares trade under the symbol ENB on the Toronto (TSX) and New York (NYSE) stock exchanges. To learn more, visit us at www.enbridge.com.