Canadian pipeline operator Enbridge said on Tuesday it would form a partnership with I Squared Capital and pipeline firms WhiteWater and MPLX to connect Permian supplies to the U.S. Gulf Coast.
“Enbridge will have a 19% stake, WhiteWater and I Squared a combined 50.6% stake while MPLX will hold 30.4% in the venture. The deal is expected to close in second quarter,” the news agency Reuters reported.
“Acquiring a meaningful equity interest in an integrated Permian natural gas pipeline and storage network that is directly connected to our existing infrastructure at Agua Dulce through this JV with WhiteWater/I Squared and MPLX is very exciting,” said Cynthia Hansen, EVP and President, Gas Transmission and Midstream of Enbridge.
“This is a great way to enhance our super-system approach, bringing energy supply to places where it is needed most and providing last mile connectivity to domestic and export customers,” added Hansen.
Enbridge will be contributing its Rio Bravo pipeline project, which will connect the joint venture’s current infrastructure to serve LNG and other customers on the USGC, the company explained.
“The transaction optimizes our investment capacity by increasing the efficiency of our capital. We will begin receiving immediate cash flow and will share in future growth opportunities,” said Pat Murray, EVP and Chief Financial Officer of Enbridge.
Enbridge’s share of the post-closing capex to complete the Rio Bravo pipeline project will be 100% of the first ~US$150MM. After which it will be proportionate to its aggregate economic interest in that project.
“Having access to new Permian natural gas infrastructure enhances and increases the visibility of our medium-term growth outlook, while being accretive to our balance sheet,” added Murray.
