Moda Midstream, EnCap to sell Ingleside Energy Center to Enbridge for $3 Billion
Liquids terminaling and logistics company Moda Midstream and its financial sponsor, EnCap Flatrock Midstream, recently agreed to sell the Moda Ingleside Energy Center (MIEC) and other Moda assets to Enbridge for approximately $3 billion, subject to closing adjustments.
Located in Ingleside, Texas, MIEC is the nation’s largest crude export terminal by volume, having loaded more than 25% of all U.S. Gulf Coast crude exports in 2020. MIEC has an aggregate storage capacity of more than 15 million barrels and an export capacity of 1.6 million barrels per day.
The asset serves as a critical link connecting Permian and Eagle Ford production to international markets. MIEC’s proximity to open water combined with its very large crude carrier (VLCC) capability and rapid loading rates position it globally as one of the most important export facilities in the world. MIEC provides customers an advantage due to its wellhead-to-water access and direct connectivity to next-generation, long-haul crude pipelines, including Cactus I, Cactus II, Gray Oak, EPIC, and the Harvest Ingleside pipeline.
“MIEC is a flagship asset,” said Bo McCall, Moda Midstream president, CEO, and founder. “We are very proud of the safe and responsible growth we have achieved since we purchased the asset less than three years ago.
The site was originally designed by the U.S. Navy to support a carrier battle group and, despite the uncertainty following its closure, has developed into the nation’s largest exporter of crude oil, creating jobs and economic prosperity for the Coastal Bend.
“I want to congratulate everyone on the Moda team for their excellent work and many accomplishments. We are all excited to watch and support MIEC’s continued development and operational excellence under the ownership of a world-class company like Enbridge.”
Other assets included in the transaction are Moda’s Taft Terminal located near MIEC; a minority, non-operating interest in the Cactus II Pipeline; a 100% interest in Moda’s Viola Pipeline; and Moda’s St. James Development Project, a brownfield joint-development opportunity to build independent third-party logistics solutions for customers in the St. James, La., area. Both the Cactus II and Viola pipelines connect to MIEC.
At closing, Javier del Olmo, Moda’s executive vice president, COO and founder, will join Enbridge as vice president of USGC terminaling operations. Key Moda personnel and the entire MIEC team will join del Olmo at Enbridge as the core of the new USGC terminaling team in Enbridge’s liquids pipelines business unit, the companies said.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close by the end of this year.
“When we first backed the Moda management team, we had high expectations of what this talented group would achieve,” said Billy Lemmons, EnCap Flatrock managing partner. “Bo, Jon, Javier and their outstanding team have exceeded our every expectation. This is a significant transaction that will produce strong results for our investors and add value to Enbridge’s impressive asset portfolio.
“In addition, we are excited to continue our partnership with the Moda team to further enhance Vopak Moda Houston’s growth and development and explore new opportunities.”
Moda and EFM will retain ownership in Vopak Moda Houston, a world-class deepwater storage and terminaling facility in the Port of Houston, the No. 1 port in the United States in terms of total waterborne tonnage and home to the nation’s largest and world’s second-largest petrochemical complex. Vopak Moda Houston is the first greenfield terminal development in the port in more than a decade and will serve as a vital growth platform for its joint-venture partners, Royal Vopak and Moda Midstream.
Vopak Moda Houston recently commissioned its deepwater dock and has constructed storage and terminaling infrastructure for its industrial gas product line. Moda’s success in Houston is a testament to the determination and hard work across the organization since the formation of Vopak Moda Houston. Moda says it is confident the team will continue to provide new innovative liquids supply chain solutions and support for customers’ energy transition logistics needs by capitalizing on Vopak Moda Houston’s strong foundation and ideal location.
To execute on continued growth at Vopak Moda Houston and other terminaling opportunities, McCall will become chairman of Moda Midstream, and current Executive Vice President, CFO and founder Jonathan Ackerman will serve as president and CEO. Ian Levine, Moda’s current vice president of corporate strategy and treasurer, will become vice president of strategy and CFO.