Enbridge Advances U.S. Gulf Coast Strategy with Acquisition of North America's Premier Crude Export Facility

• Acquiring leading U.S. Gulf Coast light crude export platform, with VLCC capability
• Advantaged location ensures shortest transit times and lowest cost exports
• Immediately and strongly accretive investment, with ~90% contracted cash flows
• Embedded low capital organic expansion opportunities provides future growth
• Development of on-site solar power results in net-negative facility emissions

CALGARY, AB, and INGLESIDE, Texas, Sept. 7, 2021 /PRNewswire/ - Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today 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.

Forward-Looking Information

Forward-looking information, or forward-looking statements, have been included in this news release to provide information about us and our subsidiaries and affiliates, including management's assessment of our and our subsidiaries' future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ''anticipate", "believe", "estimate", "expect", "forecast", "intend", "likely", "plan", "project", "target" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to the following: the acquisition of Moda Midstream Operating, LLC (the "Transaction"), including the expected closing and the timing thereof; expected benefits of the Transaction; expected accretion of the Transaction to our financial outlook, including distributable cash flow per share and earnings per share; expected cash flows; our corporate vision and strategy; emissions reductions and targets;  expected supply of, demand for and prices of crude oil, natural gas, natural gas liquids (NGL), liquified natural gas (LNG) and renewable energy; financial strength and flexibility; expectations on sources of funding for the Transaction and sufficiency of financial resources; expected investment capacity; expected debt to EBITDA ratios; expected organic growth potential; expected solar power capacity and low carbon energy infrastructure potential; and expected continuity of management and operations.

Although we believe these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about the following: the COVID-19 pandemic and the duration and impact thereof; the expected supply of and demand for crude oil, natural gas, NGL and renewable energy; prices of crude oil, natural gas, NGL and renewable energy; anticipated utilization of assets; exchange rates; inflation; interest rates; availability and price of labor and construction materials; operational reliability; customer and regulatory approvals; maintenance of support and regulatory approvals; the timing and closing of the Transaction; the realization of anticipated benefits of the Transaction and other transactions; governmental legislation; litigation; estimated future dividends and impact of our dividend policy on our future cash flows; our credit ratings; capital project funding; hedging program; expected EBITDA; expected earnings/(loss); expected future cash flows; and expected distributable cash flow. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for our services. Similarly, exchange rates, inflation and interest rates and the COVID-19 pandemic impact the economies and business environments in which we operate and may impact levels of demand for our services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected EBITDA, expected earnings/(loss), expected future cash flows, expected distributable cash flow or estimated future dividends.

Our forward-looking statements are subject to risks and uncertainties pertaining to the successful execution of our strategic priorities; operating performance; legislative and regulatory parameters; litigation; acquisitions, dispositions and other transactions, including the Transaction, and the realization of anticipated benefits therefrom; our dividend policy; project approval and support; renewals of rights-of-way; weather; economic and competitive conditions; public opinion; changes in tax laws and tax rates; exchange rates; interest rates; commodity prices; political decisions; the supply of and demand for commodities; and the COVID-19 pandemic, including but not limited to those risks and uncertainties discussed in this news release and in the Company's other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and our future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statement made in this news release or otherwise, whether as a result of new information, future events or otherwise. All forward-looking statements, whether written or oral, attributable to us or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

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.

None of the information contained in, or connected to, Enbridge's website is incorporated in or otherwise forms part of this news release.

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SOURCE Enbridge Inc.

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