Historic agreement flows pipeline wealth to Alberta First Nations
The Athabasca region deal will give 23 Indigenous groups a stake in Enbridge pipelines.
Chief Greg Desjarlais of Frog Lake First Nation speaks during historic Enbridge agreement signing. – Province of Alberta
Key Takeaways:
- The $1.12 billion deal gives 23 First Nation and Métis groups partial non-operating interest in seven Enbridge pipelines.
- The investment will be guided by newly created entity, Athabasca Indigenous Investments.
- Closing of the transaction is expected to occur within the next month.
The Whole Story
Enbridge has inked a $1.12 billion agreement with 23 First Nation and Métis communities for them to collectively acquire an 11.57 per cent non-operating interest in seven Enbridge-operated pipelines in the Athabasca region of northern Alberta.
The agreement also creates Athabasca Indigenous Investments (Aii), which is tasked with guiding the investment. Aii now represents the largest energy-related Indigenous economic partnership transaction in North America ever.
“We are very pleased to be joining our Indigenous partners in this landmark collaboration,” said Al Monaco, president and CEO of Enbridge. “We believe this partnership exemplifies how Enbridge and Indigenous communities can work together, not only in stewarding the environment, but also in owning and operating critical energy infrastructure. We are looking forward to working with the Aii and deepening our relationship well into the future. This also fully aligns with our priority to recycle capital at attractive valuations, which can be used to fund numerous growth opportunities within our conventional and low carbon platforms.”
Pipelines included in the transaction are the Athabasca, Wood Buffalo/Athabasca Twin and associated tanks; Norlite Diluent; Waupisoo; Wood Buffalo; Woodland; and the Woodland extension. Enbridge added that these assets are underpinned by “long-life resources and long-term contracts”, which provide highly predictable cash flows.
Enbridge noted that the agreement stems from commitments it made in its recently released Indigenous Reconciliation Action Plan (IRAP). The IRAP incorporates advice into facility siting, environmental and cultural monitoring, employment, training and procurement opportunities and, most recently, financial partnerships such as the proposed Wabamun Carbon Hub.
“On behalf of the Indigenous partners, we are proud to become equity owners in these high-quality assets which contribute to North American energy supply and security,” said Justin Bourque, president of Aii. “Our partner logo theme – Seven Pipelines, Seven Generations – speaks to the long-term value potential of these assets, which will help enhance quality of life in our communities for many years to come.”
Chief Greg Desjarlais of Frog Lake First Nation, called the agreement a historic day for Indigenous people in the Athabasca region.
“In addition to an opportunity to generate wealth for our people, this investment supports economic sovereignty for our communities,” he said. “We look forward to working with a leading energy company like Enbridge, which shares Indigenous values of water, land and environmental stewardship.”
Closing of the transaction is expected to occur within the next month. BMO Capital Markets acted as financial advisor to Enbridge and Torys LLP as legal counsel. RBC Capital Markets acted as financial advisor to Athabasca Indigenous Investments and Boughton Law as legal counsel.
