Page 8 - NorthAmOil Week 36 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Enbridge to take over

leading oil export

terminal with $3bn

Moda deal

TEXAS CANADA’S Enbridge announced this week
that it had struck a deal with private equity firm
EnCap Flatrock Midstream to acquire Moda
Midstream Operating for $3.0bn in cash.
The acquisition means that Enbridge will
become the 100% owner of the Ingleside Energy
Center. The facility, near Corpus Christi, Texas,
is North America’s largest crude export termi-
nal, accounting for 25% of all US Gulf Coast
oil exports in 2020. The facility, built in 2018,
comprises 15.6mn barrels of storage and 1.5mn
barrels per day (bpd) of export capacity. It has
the capacity to handle very large crude carriers
(VLCCs) – though these vessels, which have a driving a robust return,” Enbridge stated. It
maximum capacity of 2mn barrels of oil, can added that in the longer term, there was poten-
only be partially loaded at the terminal. tial to develop additional low-carbon infra-
The terminal will be renamed as the Enbridge structure, including renewable fuels and carbon
Ingleside Energy Center (EIEC) once it changes capture capacity.
hands. “This investment is also a prime example
In a September 7 statement, Enbridge talked of how we’re focused on being a differentiated
up the terminal’s “advantaged” harbour location, service provider to our customers by lowering
with direct connections to Texas’ Permian and emissions across our systems,” stated Enbridge’s
Eagle Ford shale regions. The facility is under- president and CEO, Al Monaco. “In line with
pinned by 925,000 bpd of long-term take-or-pay that objective, we expect to develop solar power
vessel loading contracts and 15.3mn barrels of capacity at the terminal site, which will ensure
storage contracts, which Enbridge said provides it’s the most sustainable export facility in North
“visibility to future cash flows”. America and support our company-wide goal of
The acquisition is in line with Enbridge’s net zero by 2050.”
It is planning efforts to build a strong position on the Gulf Along with the Ingleside terminal, Enbridge
to add up to Coast as demand grows for low-cost sources of will acquire a 20% stake in the 670,000 bpd Cac-
60 MW of solar oil. There is also potential for the terminal to be tus II Pipeline, a 100% operating interest in the
expanded, with Enbridge saying storage capacity 300,000 bpd Viola pipeline, and a 100% oper-
power generation was permitted to be raised to 21mn barrels and ating stake in the 350,000 barrel Taft terminal
through its purchase of Moda. The company
export capacity to 1.9mn bpd.
In addition, Enbridge will own a 50% inter-
said that together, the assets will provide a fully
capacity at the est in a brownfield St James deepwater crude integrated light crude export platform.
site. and refined products terminal development The deal has, however, raised questions over
opportunity, which it said provides longer-term another Gulf Coast export terminal project in
growth potential. which Enbridge is participating. The company
The company also sought to highlight how has teamed up with Enterprise Products Part-
the asset would fit in with its growing focus on ners to build the Sea Port Oil Terminal (SPOT)
sustainability. According to its statement, it is near Houston. That project would more directly
planning to add up to 60 MW of solar power to serve heavy oil producers in Western Canada,
generation capacity at the site, making use of but there is speculation that it could now be less
the over 500 acres (2 square km) of land that is of a priority for Enbridge.
included in the purchase. Indeed, a National Bank analyst, Patrick
“This renewable investment is expected to Kenny, wrote in a research note this week
well exceed EIEC’s power requirements, allow- that Enbridge’s commitment to funding the
ing excess generation capacity to be contracted SPOT terminal “could be modest” given the
to local industrial and refining facilities while Moda deal.™

P8 www. NEWSBASE .com Week 36 09•September•2021