Encana Corp. (TSX:ECA) has sold its majority interest in the Cabin Gas Plant development in Northeast B.C. to Enbridge Inc. (TSX:ENB) for $220 million.
The deal makes Enbridge, a Calgary-based oil and natural gas distributor, the majority owner of the plant. It has a 57.6% interest in phases 1 and 2 of the development, which is projected to be capable of processing 800 million cubic feet per day of natural gas.
Upon completion of both phases, Enbridge’s total investment is expected to be $900 million.
Sixty kilometres northeast of Fort Nelson in the Horn River Basin, the plant is under construction. The first phase is expected to be in service in 2012’s third quarter. The second phase is scheduled to be completed in 2014.
Al Monaco, president, gas pipelines, green energy and international, Enbridge said “Our investment in the Cabin Gas plant development is a substantial initial step in the execution of our strategy to establish a strong position in the Canadian midstream business focused on growing unconventional gas production in B.C. and Alberta.”
For its part, Encana – North America’s second-largest natural gas producer – noted the deal brings the company’s total asset sales to $1.1 billion this year.
The company cited a long period of low natural gas prices – and the collapse earlier this year of a $5.5 billion joint venture to develop shale gas in Canada with PetroChina Co. – as factors in the decision to sell.
@JHarrisonBIV