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Dominion and Enbridge Complete $6.6 Billion Utility Transaction
03/20/2024
Enbridge Inc. has completed a $6.6 billion purchase of The East Ohio Gas Co., an Ohio natural gas company, from Dominion Energy. This acquisition is part of a larger $14 billion merger and acquisition deal previously announced by the two companies. The East Ohio Gas Co. will operate under the new name Enbridge Gas Ohio (EOG) and become part of Enbridge's Gas Distribution and Storage Business Unit, including taking on some debt as mentioned by Dominion.
EOG is set to provide over 40% of the yearly EBITDA expected from the three gas utilities Enbridge is buying from Dominion. The purchases of Questar Gas Co., Wexpro companies, and the Public Service Company of North Carolina from Dominion are still in progress, with Enbridge planning to finalize these in 2024 after getting the necessary regulatory approvals.
EOG serves over 1.2 million customers in Ohio alone, boasting a significant infrastructure network that includes over 22,000 miles of pipelines for transmission, gathering, and distribution, as well as underground storage and connections to several major interstate pipelines and natural gas producers.
Adding a big gas company from Ohio to Enbridge's business is a smart move. Michele Harradence, who leads Enbridge's gas distribution and storage, says this helps the company grow and keep making steady money. Gas companies are important because they provide safe and affordable energy that people need for a long time.
This new addition will help Enbridge make more money steadily until the end of the decade. It's a good investment that matches their plan to pay regular dividends to their shareholders. Also, with this purchase, Enbridge now works in all its business areas in Ohio, which means more chances to do well and make money.
Dominion Energy, with its headquarters in Richmond, Virginia, serves about 6 million customers across 15 states with electricity and natural gas. The company has set a commitment to achieve Net Zero emissions by 2050.
About Enbridge
Enbridge, based in Calgary, Canada, manages 30% of North America's crude oil transportation and nearly 20% of the US's natural gas, with the world's most complex liquid transportation system extending 17,809 miles. Following a significant acquisition in September 2023, it became North America's largest gas utility by volume. A pioneer in renewable energy, Enbridge is committed to achieving net-zero greenhouse emissions by 2050, focusing on sustainability and reducing emissions intensity by 35% by 2030. Its gas transmission network, vital for LNG exports, moves about 24.6 billion cubic feet of natural gas daily across key markets in North America.
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Pembina (PBA) to Acquire Enbridge's Joint Ventures for $2.3 Billion - C$3.1 Billion
Pembina Pipeline Corporation PBA, a well-known player in the Canadian midstream sector, recently announced its plan to acquire Enbridge Inc.'s remaining shares in the Alliance Pipeline, Aux Sable pipelines, and NRGreen joint ventures. The deal, valued at C$3.1 billion or US$2.3 billion, marks a key step for Pembina in asserting its leadership in North America's natural gas transportation sector. This strategic acquisition is expected to considerably boost Pembina's growth and profitability in the coming years.
Non-Core Canadian Assets of Murphy Oil Successfully Divested for $104M
Houston-based Murphy Oil Corp. has successfully concluded the divestiture of its non-core operated assets located across its Western Canadian terrain, including the assets in the Kaybob Duvernay region and the complete non-operated Placid Montney position through a subsidiary. The divestiture was initially made public in August and was concluded. The transaction yielded cash proceeds of around US$104 million (CA$141 million), slightly lower than the originally anticipated US$112 million.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.