Enbridge to buy US Gulf Coast gas storage facility for $335 million (updated)

Brookfield Infrastructure Partners LP

01/03/2023 13:07

(Adds details, outlook)
       March 1 (Reuters) - Canadian pipeline operator Enbridge
Inc  ENB.TO  said on Wednesday it would buy a gas storage
facility in Tres Palacios in the U.S. Gulf of Mexico coast
region for $335 million to strengthen its liquefied natural gas
(LNG) export business.
    The deal looks to tap into high demand for North American
LNG exports after Western sanctions on major producer Russia
following its invasion of Ukraine squeezed a tight global
supply.
    The Tres Palacios gas storage facility currently has a
capacity of about 35 billion cubic feet and serves gas-fired
power generation in Texas and Mexico.
    Enbridge had earlier said it expects to deploy about C$6
billion ($4.42 billion) of capital in 2023, inclusive of
maintenance capital.
    "We will continue to maintain the flexibility to execute on
other accretive, value-enhancing activities such as tuck-in
acquisitions and returning additional capital to shareholders,"
Chief Executive Greg Ebel said in a statement.
    The deal is expected to close in the second quarter.
    The pipeline operator also said it has decided to proceed
with the construction of the Enbridge Houston Oil Terminal for
an initial capital cost of $240 million.
    Enbridge also committed to invest $1 billion to Divert Inc,
which converts food waste to energy, as part of C$3.3 billion 
in new accretive investments.
    The company, which will hold its investor day later on
Wednesday, said it expects an annual core earnings growth rate
of 4% to 6% through 2025.


($1 = 1.3585 Canadian dollars)

 (Reporting by Sourasis Bose in Bengaluru; Editing by Saumyadeb
Chakrabarty and Sriraj Kalluvila)
 ((Sourasis.Bose@thomsonreuters.com;))