Under the terms of the agreement signed earlier this year, indirect wholly-owned subsidiaries of the Enbridge have agreed to acquire 50% stake in the US segment of the Alliance Pipeline, resulting in the consolidation of ownership in the Alliance Pipeline with Veresen, which holds the remaining 50% interest.
The transaction also included the purchase of Class A Units which provide a defined cash flow stream from the Southern Lights Pipeline.
The Alliance Pipeline system, which features a 3,719km Canadian and US natural gas transmission pipeline system, supplies natural gas from the Western Canadian Sedimentary Basin and the Williston Basin to the Chicago market hub.
Enbridge Income Fund Holdings president Perry Schuldhaus said: "We are very pleased to close this transaction and add these desirable assets to our portfolio.
"These assets are supported by strong fundamentals and commercial terms, and are ideally suited for our low-risk business model. They bolster and diversify the Fund’s future cash flow and generate healthy accretion which supports an immediate 12.1 percent increase in the dividend."
The Southern Lights diluent delivery system carries product through 2,556km of pipeline starting near Chicago and terminating in Edmonton, Alberta.
