Enbridge Completes Acquisition of Questar Gas Company
Enbridge (TSX: ENB, NYSE: ENB) announced the completion of its acquisition of Questar Gas Company and its related Wexpro companies from Dominion Energy. Questar Gas, serving 1.2 million customers in Utah, Wyoming, and Idaho, will now operate under the names Enbridge Gas Utah, Enbridge Gas Wyoming, and Enbridge Gas Idaho. Questar's assets include over 21,000 miles of natural gas pipelines and a liquefied natural gas storage facility. Enbridge expects this acquisition to enhance its utility business model, contributing stable cash flows and supporting long-term dividend growth. The acquisition of the Public Service Company of North Carolina is also expected to close in 2024, further adding to the company's EBITDA.
- Acquisition of Questar Gas Company completed, adding 1.2 million customers.
- Questar's assets include over 21,000 miles of pipelines and a liquefied natural gas storage facility.
- Enhances Enbridge's utility business model, providing stable, predictable cash flows.
- Supports long-term dividend growth profile.
- Expected contributions from recent acquisitions to make up 80% of annualized EBITDA from three new gas utilities.
- No mention of acquisition cost, potentially obscuring immediate financial impact.
- Integration risks associated with adding a large-scale multi-state utility.
- Dependence on regulatory approvals for the closing of PSNC acquisition, adding uncertainty.
Insights
Enbridge's acquisition of Questar Gas Company is a strategic move that significantly enhances its gas distribution and storage capabilities. This acquisition adds over 1.2 million customers and substantial infrastructure, including over 21,000 miles of pipelines and a liquefied natural gas storage facility, to Enbridge's portfolio. This expansion into rapidly growing areas like Utah, Wyoming and Idaho, known for their robust economic and population growth, is poised to boost Enbridge's revenue streams and overall market presence.
From a financial perspective,
Enbridge's growth profile appears strong, with the acquisition supporting long-term dividend growth. Investors should note that while this adds significant value, the successful integration of Questar's assets and employees will be important for realizing these benefits. Additionally, the completion of the PSNC acquisition will further solidify Enbridge's market position.
The acquisition of Questar Gas Company by Enbridge represents a strategic move into regions with high economic growth rates. Notably, areas like Utah, southwestern Wyoming and southeastern Idaho have been experiencing rapid population increases, which translate into rising energy demand. By establishing a presence in these areas, Enbridge is positioning itself to capitalize on future growth opportunities in the natural gas sector.
The interconnections to multiple interstate natural gas pipelines enhance Enbridge's ability to manage supply logistics effectively, mitigating risks associated with supply disruptions. Additionally, the integration of Questar's assets, such as the liquefied natural gas storage facility, boosts the reliability of Enbridge's gas supply chain, which is a significant competitive advantage.
For retail investors, this acquisition signals Enbridge's commitment to expanding its market share and securing long-term revenue. However, they should remain aware of potential integration challenges and the continuing regulatory approvals needed for the PSNC acquisition. If executed correctly, these moves will likely strengthen Enbridge's market position and revenue stability, benefiting shareholders in the long run.
Questar Gas is a premier multi-state utility that distributes natural gas in
"We are excited to welcome another strong gas utility to Enbridge. Questar Gas and Wexpro enhance the scale and breadth of our existing low risk utility business model and support our long-term dividend growth profile by providing stable, predictable cash flows," said Michele Harradence, Enbridge Executive Vice President and President, Gas Distribution and Storage. "We welcome Questar Gas and Wexpro employees into the Enbridge family of companies and look forward to building long‑term productive relationships with all of their stakeholders in
The closing of the purchase of the Public Service Company of
At Enbridge, we safely connect millions of people to the energy they rely on every day, fueling quality of life through our North American natural gas, oil, and renewable power networks and our growing European offshore wind portfolio. We are investing in modern energy delivery infrastructure to sustain access to secure, affordable energy and building on more than a century of operating conventional energy infrastructure and two decades of experience in renewable power. We are advancing new technologies, including hydrogen, renewable natural gas, and carbon capture and storage, and are committed to achieving net zero greenhouse gas emissions by 2050. Headquartered in
Forward-looking statements have been included in this news release to provide readers with information about Enbridge and its subsidiaries and affiliates, including management's assessment of Enbridge's and its subsidiaries' future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ''anticipate'', ''expect'', ''project'', ''estimate'', ''forecast'', ''plan'', ''intend'', ''target'', ''believe'', "likely", and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this news release include, but are not limited to, statements with respect to Enbridge's acquisition of three gas utilities, including Questar Gas, from Dominion (the "Acquisitions"), including the characteristics, expected closing dates, value drivers, annualized EBITDA contribution and anticipated benefits thereof, on a standalone and combined post-Acquisitions basis; cash flow profile and outlook; and long term dividend profile.
Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about the following: our ability to complete the Acquisitions and successfully integrate the gas utilities without material delay, material change in terms, higher than anticipated costs or difficulty, or loss of key personnel; the expected supply of, demand for, export of, and prices of crude oil, natural gas, natural gas liquids ("NGL"), liquefied natural gas ("LNG"), and renewable energy; energy transition and lower carbon energy and our approach thereto; global economic growth and trade; anticipated utilization of our assets; exchange rates; inflation; interest rates; availability and price of labor and construction materials; the stability of our supply chain; operational reliability and performance; customer, regulatory, and stakeholder support and approvals, including, with respect to the Acquisitions; anticipated construction and in-service dates; weather; announced and potential acquisitions, dispositions, and other corporate transactions and projects, and the timing and terms, and the impact thereof, including the Acquisitions; the realization of anticipated benefits of transactions, including the Acquisitions; governmental legislation; litigation; impact of the Company's dividend policy on its future cash flows; Enbridge's credit ratings; hedging programs; expected EBITDA and expected Adjusted EBITDA; expected earnings/(loss) and adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected future cash flows and expected future distributable cash flow ("DCF") and DCF per share; estimated future dividends; financial strength and flexibility; sources of liquidity and sufficiency of financial resources; debt and equity market conditions; general economic and competitive conditions; ability of management to execute key priorities, including with respect to the Acquisitions; and the effectiveness of various actions resulting from the Company's strategic priorities. Assumptions regarding the expected supply of, and demand for, crude oil, natural gas, NGL, LNG, and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for Enbridge's services. Similarly, exchange rates, inflation, and interest rates impact the economies and business environments in which Enbridge operates and may impact levels of demand for Enbridge's services and cost of inputs and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected EBITDA, expected Adjusted EBITDA, expected earnings/(loss), expected adjusted earnings/(loss), expected DCF and associated per share amounts, and estimated future dividends.
Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to the realization of anticipated benefits and synergies of projects and transactions, including the Acquisitions, successful execution of our strategic priorities, operating performance, Enbridge's dividend policy, regulatory parameters, litigation, acquisitions and dispositions, and other transactions, including the Acquisitions, and the realization of anticipated benefits therefrom; operational dependence on third parties; project approval and support, renewals of rights-of-way, weather, economic and competitive conditions, global geopolitical conditions, political decisions, public opinion, changes in tax laws and tax rates, exchange rates, interest rates, inflation, commodity prices, and supply of, and demand for, commodities and other alternative energy, including, but not limited to, those risks and uncertainties discussed in this and in the Company's other filings with Canadian and
Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events, or otherwise. All forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on Enbridge's behalf, are expressly qualified in their entirety by these cautionary statements.
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SOURCE Enbridge Inc.
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