Enbridge advances Gulf Coast strategy with US$3B Moda Midstream purchase

In this file photo taken on March 11, 2019 a refinery near the Corpus Christi Ship Channel is pictured in Corpus Christi, Texas. LOREN Elliott/AFP via Getty Images

Canadian pipeline giant Enbridge Inc. is increasing its presence on the U.S. Gulf Coast through a US$3-billion acquisition.

The Calgary-based company said Tuesday it will buy U.S.-based terminal and logistics company Moda Midstream Operating LLC from private-equity firm EnCap Flatrock Midstream.

As part of the deal, Enbridge will acquire North America’s largest crude export terminal, the Ingleside Energy Center located near Corpus Christi, Texas.

The terminal, which will be renamed the Enbridge Ingleside Energy Center, comprises 15.6 million barrels of storage and 1.5 million barrels per day of export capacity. It loaded 25 percent of all U.S. Gulf Coast crude exports in 2020.

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Enbridge has been seeking to build a strong position on the U.S. Gulf Coast to meet growing global demand for lower-cost, sustainable energy supply.

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The Ingleside Energy Center is located in proximity to low-cost and long-lived oil reserves in the Permian and Eagle Ford basins, said Enbridge chief executive Al Monaco.

The facility is considered to be one of North America’s most competitive export facilities, underpinned by 925,000 barrels per day of long-term take-or-pay vessel loading contracts and 15.3 million barrels of long-term storage contracts.

The deal, which will close in the fourth quarter and will initially be funded through existing liquidity, will immediately add to the company’s earnings, Monaco said.

“This blue-chip platform aligns very well with our long-standing shareholder value proposition,” he said in a news release.

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Enbridge, which has set a companywide goal of becoming a net-zero emitter of greenhouse gases by 2050, said it plans to lower the overall emissions from the Ingleside Energy Center by adding up to 60 MW of solar power capability to the site.

The solar capacity will be used to meet the power needs of the facility, and the excess generation will be contracted to local industrial and refining facilities.

Longer term, Enbridge said there is potential to develop additional low carbon energy infrastructure within the facility, including renewable fuels and carbon capture projects.

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The purchase will also give Enbridge access to other crude export assets in the Gulf Coast region, including the Cactus II Pipeline, the Viola Pipeline and the Taft terminal.

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