Enbridge Bolsters U.S. Gulf Coast Export Capacity with $3 Billion Moda Midstream Buy

(Reuters) -- Enbridge Inc. said on Tuesday it was buying logistics company Moda Midstream Operating LLC for $3 billion in cash, gaining access to an export terminal in Texas that loaded more than a quarter of all U.S. Gulf Coast crude exports last year.


The terminal, Moda Ingleside Energy Center, connects the prolific Permian and Eagle Ford shale oil basins to international markets and has an export capacity of 1.5 million barrels per day with storage of 15.6 million barrels.

"Over the last several years we've been building a strong position in the U.S. Gulf Coast through both natural gas and crude infrastructure," Enbridge President and CEO Al Monaco said. "Our strategy is driven by the important role that low cost, sustainable North America energy supply will play in meeting growing global demand. With close proximity to world-class Permian reserves, and with cost effective and efficient export infrastructure, our new Enbridge Ingleside terminal will be critical to capitalizing on North America's energy advantage."

Private equity firm EnCap Flatrock Midstream owns Moda, which purchased the Ingleside export facility from Occidental Petroleum Corp in August 2018.

The terminal can partially load very large crude carriers (VLCCs), tankers that can carry as much as 2 million barrels of oil.

Other assets in the transaction include Moda's Viola pipeline, Taft Termina and Cactus II Pipeline.

Enbridge said the deal would be initially funded with current liquidity and the acquired assets would immediately add to Enbridge's distributable cash flow per share and earnings per share.

Moda's founder, Javier del Olmo, will join Enbridge as a vice president, the company said in a statement.

U.S.-listed shares of the pipeline operator were down 0.5% in early market trading.

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