Enbridge Inc. is negotiating with shippers for as much as 95,000 b/d of incremental contract capacity on its 585,000-b/d Flanagan South crude oil pipeline system (FSP) and plans to hold an open season in March 2023. As part of managing the additional commitments on FSP, Enbridge will build the 15-million bbl Enbridge Houston Oil Terminal (EHOT).
The greenfield terminal will provide 2.5 million bbl of heavy crude storage in its initial stage at a site adjacent to the end of the 950,000-b/d Seaway Pipeline Enbridge owns in partnership with Enterprise Products Partners LP. The terminal’s full capacity will be underpinned by long-term take-or-pay contract.
EHOT will have access to the Houston refining complex and export opportunities through Seaway docks at Freeport and Texas City, Tex., as well as future access to Enterprise's planned 85,000-bbl/hr offshore Sea Port Oil Terminal (SPOT), subject to that project proceeding. SPOT received federal approval last year (OGJ Online, Nov. 30, 2022). Enbridge’s new terminal will cost $240 million.
Enbridge has planned a total of $3.3 billion in new investments, $2.4 billion of which will be applied to gas transmission system modernization and utility capital. The company also will be acquiring 35 bcf of Gulf Coast gas storage in Matagorda County, Tex., buying Tres Palacios Holdings LLC for $335 million from Brookfield Infrastructure Partners and Crestwood Equity Partners LP.
Tres Palacios includes an integrated 62-mile natural gas header pipeline system, with eleven inter and intrastate natural gas pipeline connections, including Enbridge's 12-bcfd Texas Eastern pipeline. The storage site is comprised of three natural gas storage salt caverns, with a fully-contracted expansion project underway for a fourth cavern that will increase working gas capacity by about 6.5 bcf.
The additional cavern is in the permitting phase. The transaction is expected to close second-quarter 2023, subject to customary regulatory approvals and closing conditions.
Enbridge also is acquiring a 10% stake in Divert Inc., a food waste management company expanding into renewable natural gas (RNG) to help major food retailers manage their waste more sustainably, for $80 million. The agreement includes further investment opportunities to develop wasted-food-to-RNG projects across the US. Enbridge expects to close the transaction in March 2023.
Finally, Enbridge is planning to build a 14 km natural gas pipeline to support ArcelorMittal Dofasco GP's plan to change the way it makes steel, eliminating coal as a fuel for ironmaking. Enbridge describes it as the largest greenhouse gas emissions-reduction project underway in Ontario, with expectations that it will reduce emissions by 60% from current levels. In 2024, Enbridge plans to file a leave-to-construct application with the Ontario Energy Board.
