Canada’s Enbridge Purchases The US Largest Crude Oil Terminal As Part Of A $3bn Deal
The Canadian pipeline company, Enbridge, is betting on sustainable US energy production with the purchase of 3b worth in assets. The price tag includes the purchase of a Texan crude oil terminal, which is so far North America’s largest in terms of volume.
The Canadian company’ will take over Ingleside Energy Center, one of the famous terminals close to Port of Corpus Christi. Enbridge is also staking in many developed pipeline networks leading from the US inland oilfields, to the main terminal at the coast of the Gulf of Mexico.
Acquiring the energy center is part of the all-cash deal for the valuable assets owned by Moda Midstream, which was backed by private equity. The agreement comes at a time when the US oil drillers have cut back their output targets after more than a decade of growth struggle, making them shift focus from pumping to profits.
The Calgary-based Enbridge is predicted to perform incredibly by leveraging the strong export history of the terminal.
According to Al Monaco, Enbridge’s chief executive, the Canadian pipeline company has been focusing on building a strong position in the Gulf Coast through crude and natural gas infrastructure.
“Our strategy is driven by the important role that low-cost, sustainable North America energy supply will play in meeting growing global demand,” said Al Monaco.
Based on reliable statistics, US crude oil exports held up well over the past 18 months despite the covid-19 onslaught. Despite the flopping performance of the oil industry during the pandemic, the US crude export remained relatively stable with a slight drop. For instance, the export dropped from 3.6m barrels per day in March to 3.4m barrels per day in June 2020.
According to Enbridge’s insiders, the deal would significantly advance its plans for the Gulf Coast crude oil export considering that a quarter of US crude export went through the Ingleside in 2020.
The pipeline assets Enbridge acquired alongside the Ingleside export center gave it clear integration benefits. As such, the Enbridge’s share went 1% up soon after the deal went public.