Brookfield Infrastructure Corp is exploring a potential sale of NorthRiver Midstream in a deal which could value the Canadian natural gas-focused pipeline operator at around C$7 billion ($5 billion), people familiar with the matter said.
The investment firm has been working with bankers in recent weeks to solicit potential buyer interest in NorthRiver, said the sources, who spoke on condition of anonymity to discuss private deliberations. Rising demand for energy infrastructure assets from both strategic and financial buyers has pushed up valuations and encouraged some owners to explore sales of businesses they have held for several years.
The sources cautioned there was no guarantee that a deal for NorthRiver would be struck, and Brookfield Infrastructure could ultimately retain the business.
Brookfield Infrastructure and NorthRiver declined comment.
NorthRiver Midstream owns pipelines and processing infrastructure that move natural gas from the fields of the Montney shale formation in British Columbia and Alberta to larger pipes which transport it to customers in Canada and the United States, according to its website. Brookfield Infrastructure agreed to buy gathering and processing assets from Enbridge in 2018 for C$4.3 billion. The assets were later consolidated under the NorthRiver Midstream brand. On an April 29 earnings call, Chief Executive Sam Pollock said Brookfield Infrastructure was weighing whether to pursue further growth opportunities at NorthRiver or take advantage of what he described as a “pretty constructive” market for midstream businesses. Brookfield Infrastructure was not asked about, and did not discuss, NorthRiver when it reported earnings on Thursday. Companies do not normally disclose information on earnings calls about active sale efforts outside of rare instances, such as when updating on previously-announced moves. Energy infrastructure assets have attracted strong interest from private equity firms, pension funds and infrastructure investors seeking stable cash flows, while publicly traded midstream companies have also looked to expand their networks. In recent years, Canada’s cautious approach to approving new oil and gas pipelines, particularly large long-distance projects, has limited the supply of new infrastructure and supported valuations for existing midstream assets. While the environment has changed somewhat under the current administration of Mark Carney, large-scale pipeline systems remain difficult to replicate.
(Reporting by David French in New York; editing by Echo Wang and Nick Zieminski)