- Enbridge (TSX:ENB) has closed its acquisition of Questar Gas Company and its related Wexpro companies from Dominion Energy Inc.
- This is a significant expansion of the energy infrastructure giant’s presence in the U.S. utility sector and can enhance its capabilities in natural gas distribution and storage
- The Canadian energy stock’s acquisition of Questar Gas, valued at approximately C$2.5 billion, is a part of the company’s strategy to diversify and strengthen its portfolio
- Enbridge Inc. stock opened trading at C$49.46 per share
Enbridge (TSX:ENB) has closed its acquisition of Questar Gas Company and its related Wexpro companies from Dominion Energy Inc.
This move announced Monday is the latest in the energy infrastructure giant’s work to grow its presence in the U.S. utility sector, potentially enhancing its capabilities in natural gas distribution and storage.
The Canadian energy stock’s acquisition of Questar Gas, valued at approximately C$2.5 billion, is a part of the company’s recent efforts to diversify and strengthen its portfolio. Questar Gas is a premier multi-state utility company with a substantial customer base and a notable operational track record. The acquisition includes all of Questar’s related Wexpro companies, which are involved in natural gas production and have significant reserves and production facilities.
Questar Gas operates in three states: Utah, Wyoming and Idaho. After the acquisition, Questar Gas will be rebranded and operate under the names Enbridge Gas Utah, Enbridge Gas Wyoming and Enbridge Gas Idaho, respectively. This regional diversification allows Enbridge to enter new markets with robust demand for natural gas, enhancing its footprint in the U.S. utility sector.
Questar Gas will become part of Enbridge’s Gas Distribution and Storage (GDS) business unit. The GDS unit is an important component of Enbridge’s operations, providing reliable and efficient gas distribution services to millions of customers. The integration of Questar Gas is expected to bolster Enbridge’s existing GDS holdings, leveraging Questar’s established infrastructure and customer base.
The acquisition is anticipated to provide Enbridge with stable and predictable revenue streams because of the regulated nature of Questar’s utility operations. Utility businesses typically offer long-term contracts and steady cash flows, which can enhance financial stability and predictability for 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,” Michele Harradence, Enbridge’s executive vice president and president, gas distribution and storage said in a news release. “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 Utah, Wyoming, and Idaho.”
Calgary-based Enbridge is a pipeline operator that supplies millions of customers with North American natural gas, oil and renewable power networks, while growing its European offshore wind portfolio and advancing new technologies in hydrogen, renewable natural gas, and carbon capture and storage.
Enbridge Inc. stock (TSX:ENB) opened trading at C$49.46 per share and has risen 5.54 per cent over the past three months, roughly the same level of growth it has seen since 2019.
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