Midstream

Enbridge acquires top crude export facility boosting growth potential

Enbridge Line 5 sustainability

Enbridge, the Canadian midstream company, announced this Tuesday it has acquired Moda Midstream Operating LLC, from EnCap Flatrock Midstream. The acquisition was for $3 billion in cash. Transaction will significantly advance Enbridge’s U.S. Gulf Coast export strategy and connectivity to low-cost and long-lived reserves in the Permian and Eagle Ford basins.

As part of the transaction, Enbridge will acquire an interest in a robust pipeline network that will provide the company an integrated export platform. One of those assets is the Ingleside Energy Center located near Corpus Christi, Texas. After the transaction, the center will be renamed Enbridge Ingleside Energy Center (EIEC).

According to the company’s statement, the terminal is a state-of-the-art one, built in 2018. It also has 15.6 million barrels of storage and 1.5 million barrels per day of export capacity. In fact, the center will provide Enbridge a strategic location with a direct connection to low-cost, long-lived supply. In fact, it is one of the most competitive export facilities globally. Enbridge will acquire a 100% operating interest in this asset.

In addition to the EIEC, Enbridge will also acquire a 20% interest in the 670-thousand-barrel per day Cactus II Pipeline; a 100% operating interest in the 300-thousand-barrel per day Viola pipeline; a 100% operating interest in the 350-thousand-barrel Taft Terminal.
Together with EIEC, these pipeline and storage assets provide a fully integrated light crude export platform.

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Enbridge to develop renewable energy solutions on EIEC acreage

Enbridge says on the statement that all the acquired assets will be immediately and strongly accretive to distributable cash flow per share and earnings per share. The portfolio acquisition also pushes Enbridge’s growth potential of its post-2023 outlook.

About such matter, Al Monaco, President and Chief Executive Officer of Enbridge, said. “With close proximity to world-class Permian reserves and with cost-effective and efficient export infrastructure, our new Enbridge Ingleside terminal will be critical to capitalizing on North America’s energy advantage.”

He also remarked. “This blue-chip platform aligns very well with our long-standing shareholder value proposition; strong commercial underpinnings that generate highly transparent and low-risk cash flows, establishing a new platform for low capital intensity growth, and an attractive financial return, all while retaining a strong balance sheet and financing flexibility.”

Finally, Enbridge expects that on the land of the new EIEC, solar power and other renewable energy solutions like manufacturing of renewable fuels, and also carbon capture could be developed. Transaction will close in the fourth quarter of 2021.

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