Argus Media Limited

09/07/2021 | News release | Distributed by Public on 09/07/2021 08:54

Enbridge to buy US Gulf coast oil export terminal

Canadian midstream giant Enbridge agreed to buy Moda Midstream in a $3bn cash transaction, including a large crude export terminal near Corpus Christi, Texas.

Enbridge entered into an agreement with EnCap Flatrock Midstream to purchase Moda Midstream Operating which includes the terminal in Ingleside, Texas, which was built in 2018, has 15.6mn bl of storage capacity, and can partially load very large crude carriers (VLCCs).

The terminal, which will be renamed the Enbridge Ingleside Energy Center, can export up to 1.5mn b/d and loaded 25pc of all US crude exports last year, the companies said.

Enbridge will also acquire a Moda terminal in Taft, Texas; the 300,000 b/d Viola pipeline; and a 20pc interest in the 670,000 b/d Catcus 2 pipeline which carries crude from the Permian basin in west Texas to Corpus Christi.

The purchase of Moda is part of Enbridge's strategy to build a strong position in US Gulf coast natural gas and crude infrastructure 'driven by the important role that low cost, sustainable North America energy supply will play in meeting growing global demand,' chief executive Al Monaco said.

The transaction is expected to close in the fourth quarter.

The Corpus Christi area, including Ingleside, has become the top hub to export US crude after three major pipelines, including Cactus 2, started service last year. The three lines have the capacity to move more than 2mn b/d of Permian basin and Eagle Ford crude to Corpus Christi, essentially for export.

The Corpus Christi area accounted for about 53pc of US crude exports -- or 1.57mn b/d -- in January-June 2021, according to monthly Census trade data.

By Eunice Bridges