Enbridge-Marathon venture buys interest in Bakken Pipeline

MarEn Bakken Co. LLC—an entity jointly owned by Enbridge Energy Partners LP and Marathon Petroleum Corp.—has agreed to acquire from Energy Transfer Partners LP (ETP) and Sunoco Logistics Partners LP a 36.75% interest in the Bakken Pipeline project for $2 billion. The Bakken system includes the Dakota Access pipeline and the Energy Transfer Crude Oil (ETCO) pipeline.

After closing, a Marathon subsidiary will participate in a Dakota Access-Energy Transfer Crude Oil Pipeline open season, and subject to its terms and conditions, make a long-term volume commitment on the Bakken project. The companies expect to hold the open season before the end of next month.

Bakken Holdings Co. LLC, a joint venture of ETP and Sunoco, owns 75% of both Dakota Access and ETCO. Bakken Pipeline will consist of 1,172 miles of new 30-in. OD crude oil pipeline extending from North Dakota to Patoka, Ill., and more than 700 miles of pipeline converted to crude service from Patoka to Nederland, Tex. Dakota Access will deliver more than 470,000 b/d of crude oil from the Bakken-Three Forks production area in North Dakota to the Midwest. ETCO will transport crude from the Midwest to Sunoco and Phillips 66 storage terminals in Nederland.

Bakken Holdings is selling 49% of its 75% interest (36.75%) in Dakota Access and ETCO. The remaining 25% of each is owned by wholly owned subsidiaries of Phillips 66. ETP-Sunoco will retain 38.25% ownership. Sunoco will operate Bakken Pipeline.

The sale is expected to close this quarter subject to regulatory approvals.

ETP and Sunoco will receive $1.2 billion and $800 million in cash at closing, respectively. The Bakken Pipeline partners have arranged $2.5 billion in project financing to complete the project and will use the sale’s proceeds to pay down debt and to help fund other growth projects.

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