Enbridge sells its interest in seven pipelines to Indigenous groups

The deal is the largest of its kind in North America to date, according to the company.

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Calgary-based Enbridge Inc. has signed an agreement with 23 First Nations and Métis communities to sell an 11.57% interest in seven pipelines located in the Athabasca region of northern Alberta for 1 .12 billion dollars.

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The agreement is the largest energy-related Aboriginal economic partnership transaction in North America to date, the pipeline company said Wednesday.

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A newly created entity called Athabasca Indigenous Investments (AII) will be responsible for the investment.

“The agreement is important because it gives the 23 Indigenous communities that are directly impacted by these assets direct ownership,” said Justin Bourque, President of AII. « It has positioned communities for long-term impact now and for future generations. »

He said the deal will be funded through a combination of debt and equity, with debt financing coming from Alberta Indigenous Opportunities Corp., a group that funds Indigenous communities seeking business partnerships.

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Frog Lake First Nation Chief Greg Desjarlais called the agreement “historic” for communities in the area.

« In addition to being an opportunity to generate wealth for our people, this investment supports the economic sovereignty of our communities, » he said.

Robert Merasty, executive director of the Indigenous Resource Network, said the deal was « great news » for Indigenous communities.

« We still have work to do, » he said. “We need a national program, like the AIOC, so agreements like this can happen across Canada.

The agreement is part of Enbridge’s Indigenous Reconciliation Action Plan, which seeks to strengthen its relationships with Indigenous communities and employees. It also fulfills the company’s objective of « recycling capital at attractive valuations », he said.

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« We believe this partnership exemplifies how Enbridge and Indigenous communities can work together, not only in environmental stewardship, but also in owning and operating critical energy infrastructure, » said Al Monaco, CEO of the company, in the press release.

The pipelines included in the agreement are the Athabasca, Wood Buffalo/Athabasca Twin and associated reservoirs; Norlite Thinner; Waupisooo; wood buffalo; Woodland; and the Woodland expansion. Enbridge said these assets provide « highly predictable cash flows. »

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The size of the deal is not « particularly important » to Enbridge, Royal Bank of Canada analyst Robert Kwan said in a note to clients after the deal was announced, but he described the transaction as positive. as it advances the company’s engagement with Indigenous communities.

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Bank of Nova Scotia analyst Robert Hope expects more deals of ‘this nature’ from Enbridge in the future, and said the deal was ‘slightly positive’ for the company pipeline.

« The transaction does not materially change our per-share estimates, » he said in a note Wednesday. “We view this agreement as an example of Enbridge’s efforts to support and deepen its relationship with Canada’s Indigenous communities.

The deal is expected to close within the next month.

The agreement comes at a time when Enbridge is seeking to address environmental concerns raised by the Bad River Band of Lake Superior Chippewa in northern Wisconsin connected to its Line 5 pipeline.

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