Enbridge to buy US Gulf coast oil terminal: Update

  • Market: Crude oil
  • 09/07/21

Adds details on terminal contracts, other projects.

Canadian midstream giant Enbridge agreed to buy Moda Midstream Operating 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 assets including 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.The terminal is underpinned by 925,000 b/d of long term take-or-pay vessel loading contracts and 15.3mn bl of long-term storage contracts.

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 the Moda assets 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 Ingleside terminal could be expanded further to 21mn bl of storage and 1.9mn b/d of export capacity, Enbridge said.

Enbridge is planning to add up to 60 MW of solar power to the facility, using more than 500 acres of available land within the terminal. Enbridge plans to sell excess generation capacity to local refiners and other industries.

The deal also gives Enbridge a 50pc interest in a proposed brownfield crude and refined products terminal in St James, Louisiana.

The transaction is expected to close in the fourth quarter.

Enbridge is still considering a separate plan to build a 15mn bl crude terminal in Freeport, Texas, the company told Argustoday. That terminal would be integrated with the 950,000 b/d Seaway pipeline system that moves crude from Cushing, Oklahoma, to the Houston area. Enbridge owns Seaway in a joint venture with Enterprise Products Partners.

Enbridge also has an option to buy into Enterprise's planned offshore crude export terminal — the Sea Port Oil Terminal (SPOT) off the coast of Freeport which will be able to fully load VLCCs.

The SPOT project is "still a very attractive opportunity" and aligned with Enbridge's existing footprint, the company said.

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.


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