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Enbridge (ENB) Inks $3B Deal to Buy Big Oil Export Terminal

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Enbridge Inc. (ENB - Free Report) has announced the signing of a definitive purchase agreement with EnCap Flatrock Midstream.

Per the accord, Enbridge will be buying Moda Midstream Operating, LLC (Moda) for a cash consideration of $3 billion. The transaction, awaiting customary regulatory approvals and closing conditions, will likely consummate in the fourth quarter of this year. The most important part of the transaction is that the leading energy infrastructure North American company has agreed to acquire a 100% operating interest in the Ingleside Energy Center, situated close to Corpus Christi, TX.

Ingleside Energy Center, to be renamed as Enbridge Ingleside Energy Center, is the largest crude export terminal in North America which was responsible for loading roughly 25% of all U.S. Gulf Coast crude exports last year. The state-of-the-art terminal was built in 2018 and it has a capacity to export 1.5 million barrels per day, with a storage capacity of 15.6 million barrels. Ingleside Energy Center connects international markets with prolific basins like Permian and Eagle Ford Shale play, thereby assuring long-term sustainability in cashflows.

The company will also be acquiring a 20% interest in Cactus II Pipeline with daily transportation capacity of 670 thousand barrels. In the Viola pipeline, which can transport 300 thousand barrels per day, Enbridge will acquire 100% operating interest. In the 350-thousand-barrel Taft Terminal, the company has decided to acquire 100% operating interest.

Enbridge Inc Price

Enbridge Inc Price

Enbridge Inc price | Enbridge Inc Quote

Thus, along with pipeline and storage properties, the acquisition of Ingleside Energy Center will provide Enbridge a fully integrated light crude export platform. The midstream energy major expects the acquisition, once completed, to prove highly and immediately accretive to distributable cash flow per share and earnings per share.

Headquartered in Calgary, Canada, Enbridge currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space includeWhiting Petroleum Corporation , Continental Resources, Inc. and PDC Energy, Inc. . While Whiting Petroleum and Continental Resources sport a Zacks Rank #1 (Strong Buy), PDC Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.

Continental is expected to witness earnings growth of 256% in 2021.

PDC Energy is likely to see earnings growth of 111.8% in 2021.


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