Enbridge to acquire seven US-based renewable gas facilities for $1.65 billion

Other deals this week include two M&A deals in energy sector valued up to $658 million

Enbridge to acquire seven US-based renewable gas facilities for $1.65 billion

Enbridge to acquire seven Morrow Renewables gas facilities in the US for $1.65 billion

Enbridge Inc., a major Canadian pipeline company, has recently entered an agreement worth approximately $1.65 billion (US$1.2 billion) to acquire seven US-based Morrow Renewables operational renewable natural gas (RNG) facilities.

Renewable natural gas, often referred to as RNG, is a form of sustainable energy generated from organic waste rather than fossil fuels.

In a press release, Enbridge announced that the acquisition solidifies Enbridge's position as one of the largest transporters of RNG in terms of volume across North America.

The seven facilities in question are responsible for supplying RNG extracted from municipal landfills located in six different areas in Texas, as well as Fort Smith in Arkansas.

While RNG can be derived from various sources such as agricultural waste and food waste, these specific facilities specialize in capturing the gas produced through waste decomposition in landfills. This gas is then subjected to treatment and compression, transforming it into pipeline-grade methane. Consequently, it can be seamlessly blended into existing natural gas transmission networks, fulfilling the energy demands of transit fleets, as well as heating residential and commercial properties.

Enbridge CEO Greg Ebel said, “RNG fundamentals are strong in the United States and indicate continued growth in demand over the long-term as gas utilities increasingly continue to set RNG blending targets.”

TransAlta to purchase Alberta-based Heartland Generation for $658 million

TransAlta Corp. has entered into an agreement to acquire Energy Capital Partners affiliate, Heartland Generation Ltd., and its power generation business in Alberta and British Columbia for a total of $658 million, which includes the assumed debt.

As per the terms of the deal, Energy Capital Partners will receive $390 million, and TransAlta will take on $268 million in debt.

TransAlta currently owns and operates power generation assets in Canada, the United States, and Australia.

The acquisition will provide TransAlta with an additional 1,844 megawatts of flexible capacity, and the company anticipates corporate pre-tax synergies of approximately $20-million.

“With this acquisition we are pleased to announce the addition of highly flexible and complementary assets to our Alberta portfolio,” said TransAlta President and CEO John Kousinioris. “As the energy transition continues to drive new investment in renewables in the Province, our assessment is that the market will require low-cost, highly flexible and fast-responding generation, which will be supportive to grid reliability over the coming years. This transaction will support us in maintaining our competitive positioning and ensure we have a robust and diversified portfolio, which together with our marketing capabilities, can complement and support a cleaner grid.”

ECP Partner Andrew Gilbert said, “ECP is proud of the transition progress that Heartland has made since its acquisition in 2019 through our early coal conversions and the advancements of the Battle River Carbon Hub, all the while consistently delivering reliable electricity to the Province.”

The deal is expected to close in the first half of 2024, subject to customary closing conditions and regulatory approvals.

Caisse to buy Brazilian power transmission network Intesa for up to $108.5 million

Caisse de dépôt et placement du Québec (CDPQ) has entered an agreement to acquire Integracao Transmissora de Energia SA (Intesa), a 695-kilometre power transmission network in central Brazil, in a $108.5 million deal that marks the second power transmission investment by CDPQ in Latin America within the past 18 months.

The deal follows CDPQ’s acquisition of nearly 1,100 kilometres of power lines in Brazil, Peru, and Uruguay from Terna Group.

Upon deal closing, Intesa will be integrated into CDPQ’s Latin American power transmission platform, Verene Energia.

“The acquisition of Intesa was a natural step, for operational synergies and to give Verene scale,” said CDPQ Latin America Infrastructure Managing Director Eduardo Farhat. “The transmission sector in Brazil is part of our energy transition and decarbonization strategy, as it connects renewable sources to consumption centres.”

The deal is expected to close by the end of this year, subject to customary closing conditions.

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