Enbridge, a Canadian pipeline operator announced on Tuesday that the company was buying Moda Midstream Operating LLC via $3 billion deal. The $3 billion cash will provide the Canadian player a hold over an export terminal in Texas. This particular terminal has been a major part of North America’s oil trade. In 2020, this export terminal was responsible for loading over quarter of the total U.S. Gulf Coast crude exports.
Moda Ingleside Energy Center has been known as U.S.’s greatest crude oil export terminal. It efficiently connects the two massive shale oil basins which are Permian, and Eagle Ford to the international marketspaces. Export capabilities of the terminal are sufficiently robust reaching capacities of 1.5 million barrels per day with 15.6 million barrels storage capacity.
The export terminal is not new to acquisitions and new buyers. In August 2018, EnCap Flatrock Midstream which is well-established private equity firm purchased Moda from the Occidental Petroleum corp.The export terminal with its gigantic storage capacity and export capacities is capable of leading very large crude carriers (VLCCs), and tankers. These units have a capacity range extending to maximum 2 million barrels of oil.
The Canadian buyer has been clear enough of its intentions to enhance the company’s presence along the U.S. Gulf Coast. The acquisition is particularly promising as the region is a major refining hub for Canadian heavy oil. The deal fits right into Enbridge sustainability goals associated with solar power capacity and far-fetched goals of carbon capture.