TORONTO—Oil and gas pipeline operator Enbridge Inc. ENB 0.57% announced a deal to sell 19 natural gas gathering and processing plants to Brookfield Infrastructure Partners L.P . BIP 0.86% , another step in its bid to shrink its heavy debt burden and focus on its pipeline and utilities businesses.
The deal, for 4.3 billion Canadian dollars ($3.7 billion), comes less than two months after the company announced C$3.2 billion of asset sales. Together, the deals more than double the C$3 billion asset sale target that Enbridge’s CEO, Al Monaco, had set for this year.
Mr. Monaco has been restructuring the Calgary, Alberta-based company since becoming CEO after Enbridge’s $28 billion acquisition of Spectra Energy Corp in 2017. Enbridge borrowed billions to finance that deal, and the company has since been trying to pare that debt.
Enbridge had more than C$61 billion of long-term debt on its books at the end of March, up from more than C$35 billion, when it announced the Spectra deal.
Mr. Monaco is trying to shift Enbridge out of energy production and focus on its pipeline and utility businesses. The pipeline unit got a boost last week when the Minnesota Public Utilities Commission approved the $8 billion replacement of its Line 3 pipeline, which goes from Alberta to Wisconsin.
The company could use proceeds from the sale to Brookfield to help finance the expansion and pay down debt, said an Enbridge spokesman.
Enbridge shares rose 0.97% to close at C$46.84 Wednesday on the Toronto Stock Exchange. Over the past month, the stock has risen more than 14% as investors have reacted to the asset sales, approval of the Line 3 replacement and an announcement in May by Enbridge that it is rolling up its master limited partnerships into its corporate parent. The company made the move after the U.S. Federal Energy Regulatory Commission made a ruling to disallow certain income-tax allowances for the MLP structures.
Credit Suisse analyst Andrew Kuske estimated that the assets had earnings before interest, taxes debt and amortization of roughly C$450 million, meaning they sold the asset for a multiple to Ebitda close to 10 times.
“They’re getting a pretty good price for it,” said Manash Goswami, portfolio manager for First Asset Investment Management Inc., a firm that manages C$5 billion of exchange-traded funds.
The transaction will allow Brookfield Infrastructure, a publicly traded master limited partnership affiliated with Brookfield Asset Management , to expand the gas assets more aggressively than Enbridge could have, Mr. Kuske said.
A Brookfield spokeswoman declined to comment.