Canadian energy firm Enbridge is buying a Texas pipeline company to expand its pipeline network for transporting crude oil and natural gas. Houston-based Spectra Energy Corp. is going for $28 billion in the deal.
Enbridge spokesman Michael Barnes said the deal will expand their network to include 19,000 miles of oil pipelines in North America and more than 100,000 miles of natural gas pipeline in the U.S.
“The two companies complement each other. Enbridge is primarily moving oil in the U.S. while we have some natural gas lines and renewable energy,” Barnes said. “Spectra is heavy into natural gas lines — a very extensive network. We thought the combination of those two companies would make for a really good outcome in terms of delivering energy to a variety of customers.”
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When asked whether the acquisition was motivated by falling crude oil prices and production, Barnes said it was an opportunity “to pool those resources.” He added that the move is in line with the company’s goal of diversifying the sources of energy in its portfolio.
“Many parts of the U.S. are moving into natural gas as a way to get off of coal-fired power plants … It makes the combination very effective for our customers and some of those customers are those large generation plants that provide electricity that we all use for businesses and homes,” he said.
The company says it also plans to invest $5 billion in renewable energy sources.
In the coming months, Barnes said an integration team will help the companies transition as “seamlessly as possible.” Enbridge CEO Al Monaco will oversee operations. Greg Ebel, CEO of Spectra, will become chairman of the board for Enbridge. Barnes said it’s too early to say what the deal means for staffing, projects or operations at the two companies.
“Right now we expect that in terms of the day-to-day operations, there’s not going to be any impact until that transition is completed,” he said. “I think a good way to look at this is it’s business as usual for both companies.”
Barnes said the deal is expected to close in the first quarter of next year. Enbridge employs more than 400 workers in Wisconsin and more than 600 employees and contractors in the Duluth/Superior area. The company’s pipeline network moves up to 2.4 million barrels of oil per day through its Superior terminal.
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