Enbridge to enter into JV connecting Permian Basin pure fuel provide to rising LNG and US Gulf Coast demand

Highlights

• Buying a significant, strategic fairness curiosity within the JV.
• Instantly accretive to DCF per share, with ~90% contracted money flows.
• Receiving fast, recurring, and rising money circulate from working property with minimal commodity publicity.
• Optimises steadiness sheet by growing EBITDA and decreasing Enbridge’s share of future Rio Bravo pipeline venture CAPEX proportional to its financial curiosity in that venture.
• Embedded natural enlargement alternatives gives enticing development choices and diversifies offtake.
• The JV might be owned by WhiteWater/I Squared (50.6%), MPLX (30.4%), and Enbridge (19%) and can embrace the next property:
  • 100% curiosity in Whistler pipeline, a ~450-mile, 42-in. intrastate pipeline transporting pure fuel from an interconnect with the Waha Header within the Permian Basin to Agua Dulce, Texas, close to the place to begin of the proposed Rio Bravo pipeline.
  • 100% curiosity within the Rio Bravo pipeline venture, ~137-miles of latest 42-in. and 48-in. pipelines transporting pure fuel from the Agua Dulce provide space to NextDecade’s Rio Grande LNG venture in Brownsville, Texas.
  • 70% curiosity in ADCC pipeline, a ~40-mile, 42-in. proposed intrastate pipeline designed to move 1.7 billion ft³/d of pure fuel from the terminus of the Whistler pipeline in Agua Dulce, Texas to Cheniere’s Corpus Christi LNG export facility (the pipeline is predicted to be in-service in 3Q24 and is expandable as much as 2.5 billion ft³/d).
  • 50% curiosity in Waha Gasoline Storage, a ~2 billion ft³ fuel storage cavern facility, with further topside amenities able to injection and withdrawal.

Roughly 98% of capability is contracted underneath long-term, take-or-pay contracts with a median contract size better than 10 years. Roughly 90% of counterparties are funding grade and embrace main operators within the Permian Basin.

Upon closing of the transaction, Enbridge will contribute its wholly-owned Rio Bravo pipeline venture and ~US$350 million in money to the three way partnership, and can fund the primary ~US$150 million of the post-closing capex to finish the Rio Bravo pipeline venture. Enbridge will obtain a 19% fairness curiosity within the three way partnership and retain a 25% financial curiosity within the Rio Bravo pipeline venture (topic to sure redemption rights of the three way partnership companions).

“Buying a significant fairness curiosity in an built-in Permian pure fuel pipeline and storage community that’s instantly related to our current infrastructure at Agua Dulce by this JV with WhiteWater/I Squared and MPLX may be very thrilling. This can be a nice option to improve our super-system strategy, bringing vitality provide to locations the place it’s wanted most and offering final mile connectivity to home and export clients,” stated Cynthia Hansen, EVP and President, Gasoline Transmission and Midstream of Enbridge.

Enbridge might be contributing its Rio Bravo pipeline venture, which is able to prolong the three way partnership’s present infrastructure to serve LNG and different clients on the USGC. Enbridge’s share of the post-closing CAPEX to finish the Rio Bravo pipeline venture might be 100% of the primary ~US$150 million and, thereafter, proportionate to its combination financial curiosity in that venture.

This transaction is predicted to unlock future development alternatives for Enbridge to attach sustainable pure fuel manufacturing to export markets as a part of its USGC technique.

“The transaction optimises our funding capability by growing the effectivity of our capital. We’ll start receiving fast money circulate and can share in future development alternatives,” added Pat Murray, EVP and Chief Monetary Officer of Enbridge. “Accessing new Permian pure fuel infrastructure enhances and will increase the visibility of our medium-term development outlook, whereas being accretive to our steadiness sheet.”

Closing is predicted in 2Q24, topic to receipt of required regulatory approvals and satisfaction of different customary closing circumstances.

Learn the article on-line at: https://www.lngindustry.com/liquid-natural-gas/29032024/enbridge-to-enter-into-jv-connecting-permian-basin-natural-gas-supply-to-growing-lng-and-us-gulf-coast-demand/