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Enbridge Advances U.S. Gulf Coast Strategy with $3 Billion Acquisition of Moda Midstream

Enbridge Inc., September 7, 2021

Enbridge Inc. (Enbridge or the Company) recently announced that it has entered into a definitive purchase agreement with EnCap Flatrock Midstream to acquire Moda Midstream Operating, LLC (Moda) for U.S. $3.0 billion in cash, subject to closing adjustments. The acquisition will significantly advance the Company's U.S. Gulf Coast export strategy and connectivity to low-cost and long-lived reserves in the Permian and Eagle Ford basins. The Company values the transaction at approximately 8x projected forward EBITDA, and upon closing is expected to be immediately accretive to Enbridge's financial outlook.

"We're very excited about acquiring North America's premium, very large crude carrier (VLCC) capable, crude export terminal," commented Al Monaco, President and Chief Executive Officer of Enbridge. "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. 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.

"This blue-chip platform aligns very well with our long-standing shareholder value proposition; strong commercial underpinnings that generate highly transparent and low risk cash flows, establishing a new platform for low capital intensity growth, and an attractive financial return, all while retaining a strong balance sheet and financing flexibility.

"This investment is also a prime example of how we're focused on being a differentiated service provider to our customers by lowering emissions across our systems. In line with that objective, we expect to develop solar power capacity at the terminal site, which will ensure it's the most sustainable export facility in North America and support our company-wide goal of net zero by 2050," said Monaco.

Central to the transaction, Enbridge will acquire a 100 percent operating interest in the Ingleside Energy Center (to be renamed the Enbridge Ingleside Energy Center (EIEC)), located near Corpus Christi, Texas – North America's largest crude export terminal, which loaded 25 percent of all U.S. Gulf Coast crude exports in 2020.  This state-of-the-art terminal, built in 2018, comprises 15.6 million barrels of storage and 1.5 million barrels per day of export capacity. 

EIEC's highly advantaged outer harbor location, with direct connection to low-cost, long-lived supply, combined with VLCC capability and rapid loading rates, position it as one of the most competitive export facilities globally.  EIEC is underpinned by 925 thousand barrels per day of long term take-or-pay vessel loading contracts and 15.3 million barrels of long-term storage contracts providing visibility to future cash flows. Its direct connection to globally competitive Permian and Eagle Ford basins will assure the sustainability of cash flows for many years to come.

Enbridge will also acquire a 20 percent interest in the 670-thousand-barrel per day Cactus II Pipeline, a 100 percent operating interest in the 300-thousand-barrel per day Viola pipeline, and a 100 percent operating interest in the 350-thousand-barrel Taft Terminal.  Together with EIEC, these pipeline and storage assets provide a fully integrated light crude export platform.

The acquired assets are expected to be immediately and strongly accretive to distributable cash flow per share and earnings per share.  In addition, ongoing EBITDA generation supports the Company's dividend growth outlook and growing base of free cash flow, further strengthening its sector leading financial flexibility and preserving its $5-6 billion of annual self-funded investable financing capacity beginning in 2022. The transaction will be initially funded with existing liquidity and the Company anticipates that 2022 Debt to EBITDA will be at the lower end of its target range.

This investment also provides Enbridge with further organic growth potential supporting the Company's post-2023 growth outlook.  EIEC permitted expansions of existing storage capacity to 21 million barrels and export capacity to 1.9 million barrels per day, provide opportunity to capitalize on increasing volumes and visibility to near-term low capital intensity growth.  In addition, Enbridge will hold a 50 percent interest in a brownfield St. James deep-water crude and refined products terminal development opportunity, which provides longer term growth potential.

EIEC has been recently constructed to industry-leading environmental standards designed to minimize its carbon emissions footprint.  Enbridge expects to further lower facility emissions through the application of up to 60 MW of solar power capabilities, leveraging over 500 acres of available land included within the terminal.  This renewable investment is expected to well exceed EIEC's power requirements, allowing excess generation capacity to be contracted to local industrial and refining facilities while driving a robust return.  Longer term, there is the potential to develop additional low carbon energy infrastructure within the facility, including renewable fuels and carbon capture terminaling.

The transaction is expected to close in the fourth quarter of 2021, subject to customary regulatory approvals and closing conditions.  Moda's Ingleside Management and key Moda marine terminal personnel will remain in place following closing of the transaction, ensuring continuity of operations and ongoing development activities.

A complete description of the transaction, along with additional details on the acquired assets is available on the Investor Relations section of the Enbridge Inc. website.

Barclays acted as financial advisor to Enbridge and Sidley acted as its legal counsel.

About Enbridge Inc.

Enbridge Inc. is a leading North American energy infrastructure company. We safely and reliably deliver the energy people need and want to fuel quality of life. Our core businesses include Liquids Pipelines, which transports approximately 25 percent of the crude oil produced in North America; Gas Transmission and Midstream, which transports approximately 20 percent of the natural gas consumed in the U.S.; Gas Distribution and Storage, which serves approximately 3.8 million retail customers in Ontario and Quebec; and Renewable Power Generation, which generates approximately 1,766 MW of net renewable power in North America and Europe. The Company's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.


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