Canadian pipeline giant Enbridge (TSX:ENB) is buying Moda Midstream Operating for $3 billion U.S. in cash from EnCap Flatrock Midstream in order to add export capacity on the U.S. Gulf Coast.
The deal marks a shift in focus for Enbridge toward the U.S. market as the Calgary-based company wraps up construction of its Line 3 oil sands export pipeline after years of regulatory delays and legal battles.
Enbridge, which already handles about a quarter of all crude oil produced in North America, is betting on a strong outlook for exports of oil pumped from the Permian and Eagle Ford shale basins in Texas.
The deal includes the Ingleside Energy Center near Corpus Christi, Texas. Built in 2018, it is North America’s largest crude export terminal, which loaded 25% of all U.S. Gulf Coast crude exports last year. Enbridge will also acquire a 20% stake in the Cactus II Pipeline, which connects the Permian Basin with the Gulf Coast, plus the Viola pipeline and the Taft Terminal.
Enbridge said the acquisition will be initially funded with current liquidity, and that the deal, which is expected to close in the fourth quarter of this year, will immediately add to its earnings.
