Joint venture assets. Enbridge Inc.

By Rosa Saba

Enbridge Inc. has signed a deal to sell a minority stake in seven pipelines in the Athabasca region of northern Alberta to a group of 23 First Nation and Métis communities for $1.12 billion.

Alberta premier Jason Kenney called the purchase a “historic, game-changing deal” at a press conference Wednesday with multiple stakeholders present, including Enbridge executives and members of some of the communities involved in the purchase.

“This is a big deal,” he said. “This is the single largest Indigenous transaction in the natural resource sector in the history of North America.”

Athabasca Indigenous Investments (Aii), a limited partnership of 23 Treaty 6 and Treaty 8 First Nations and Métis communities, will manage the investment which includes an 11.57 per cent non-operating interest in the pipelines.

Aii said the deal is expected to bring in more than $10 million annually to the communities represented in the partnership.

The Alberta Indigenous Opportunities Corp., a provincial Crown corporation, said it provided a loan guarantee that enabled the communities to borrow the $250 million for their equity stake in the assets instead of contributing their own capital.

“These communities may not otherwise (have) been able to access the kind of capital required to facilitate equity share ownership in projects of this size and magnitude,” said AIOC CEO Chana Martineau.

The rest of the financing comes from a private placement completed earlier in the week, said Enbridge chief executive Al Monaco.

The AIOC was created in 2019 to help Indigenous communities get ownership stakes in the Alberta energy sector.

Monaco called the deal one of Enbridge’s proudest moments.

The pipelines included in the agreement are the Athabasca, Wood Buffalo/Athabasca Twin and associated tanks, Norlite Diluent, Waupisoo, Wood Buffalo, Woodland and the Woodland extension.

Aii president Justin Bourque said in the release Wednesday that the assets will “help enhance quality of life in our communities for many years to come.”

Chief Greg Desjarlais of Frog Lake First Nation said in the statement that the investment supports economic sovereignty for the Athabasca region communities.

At the conference, Desjarlais called the deal “a new path for our people.” He thanked AIOC for its role in the financing, and said the funds from the investment will help support such areas as healthcare, education and housing in the Athabasca region.

Richard Masson, an executive fellow at the University of Calgary School of Public Policy and chair of the World Petroleum Council, said energy companies are increasingly seeking ways to bring Indigenous ownership into the sector, giving as an example Suncor Energy selling 49 per cent of its East Tank Farm Development facility to two First Nations in 2017.

AIOC’s role in guaranteeing the loan is key to making this kind of large-scale deal work, said Masson, noting that having 23 communities in on one deal is unprecedented.

This deal will help lay the path for future investments, he said.

It’s also a “show of confidence” from Indigenous communities that the energy sector can and will move toward its environmental goals, said Masson.

This kind of investment model will likely play a role in renewable energy projects too, he said.

“Indigenous groups see the future in the energy transition, they want to be part of it.”

Enbridge said the assets are underpinned by long-life resources and long-term contracts, which provide highly predictable cash flows.

The deal is expected to close within the next month.

In March 2022, 16 Indigenous communities along the Coastal GasLink pipeline route signed option agreements for an equity stake in the project.

— With files from Amanda Stephenson

This report by The Canadian Press was first published Sept. 28, 2022.

Companies in this story: (TSX:ENB)

The Canadian Press

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