Calgary-based energy company Enbridge Inc. has announced a $14 billion deal to purchase three U.S. utilities – a move the company has portrayed as a sign of long-term commitment to natural gas.
On Tuesday, Enbridge announced it would purchase the East Ohio Gas Company, Questar Gas Company and the Public Service Company of North Carolina from Dominion Energy Inc.
The company has pledged to use USD $9.4 billion in cash and USD $4.6 billion in debt to complete the deal.
Enbridge CEO Greg Ebel told investors that the company hopes to shift to a balanced mix of crude oil and natural gas. Currently around 60% of the company’s holdings are composed of oil and other liquids.
“We remain firmly of the view that all forms of energy will be required for a safe and reliable energy transition,” said Ebel.
According to Ebel, natural gas is poised to play a critical role in advances towards a net-zero future.
“We remain firmly of the view that all forms of energy will be required for a safe and reliable energy transition,” said Ebel.
Should the deal be completed, it would make Enbridge one of the largest private companies on the continent to own gas utilities, employing over 7,000 people and delivering gas to nearly seven million people across North America.
Reactions to the surprise deal were mixed and Enbridge stocks reacted by dipping 7% on Wednesday.
“I do think the market was caught a bit off guard, as this wasn’t on my bingo card,” explained analyst Stephen Ellis from Morningstar.
“Management had a realistic approach towards allocating capital, so a smaller transaction, perhaps a deeper investment in Canadian LNG, would have been more expected.”
