Enbridge enters JV to combine Whistler, Rio Bravo natural gas assets

Enbridge Inc. has entered into a definitive agreement with WhiteWater/ I Squared and MPLX LP to form a joint venture to expand the natural gas value chain in the Permian basin and South Texas.

The JV is expected to connect Permian basin supply to incremental LNG export markets via the Rio Bravo pipeline’s connectivity with NextDecade's Rio Grande LNG plant. Additionally, the creation of the platform is anticipated to support the development of incremental pipeline projects connecting Permian supply to export markets along the Gulf Coast, the companies said in separate statements Mar. 26.

WhiteWater will continue to operate the joint venture's assets, including the Rio Bravo Pipeline project.

The joint venture will be owned by WhiteWater/I Squared (50.6%), MPLX (30.4%), and Enbridge (19.0%) and will include the following assets:

• 100% interest in Whistler pipeline, a 450-mile, 42-in OD intrastate pipeline transporting natural gas from an interconnect with the Waha Header in the Permian basin to Agua Dulce, Tex., near the starting point of the proposed Rio Bravo pipeline.
• 100% interest in the Rio Bravo pipeline project, 137-miles of new 42-in. OD and 48-in. OD pipelines transporting natural gas from the Agua Dulce supply area to NextDecade's Rio Grande LNG project in Brownsville, Tex.
• 70% interest in ADCC pipeline, a 40-mile, 42-in. OD proposed intrastate pipeline designed to transport 1.7 bcfd of natural gas from the terminus of the Whistler pipeline in Agua Dulce, Tex., to Cheniere's Corpus Christi LNG plant (the pipeline is expected to be in-service in third-quarter 2024 and is expandable up to 2.5 bcfd).
• 50% interest in Waha Gas Storage, a 2.0 bcf gas storage cavern, with additional topside facilities capable of injection and withdrawal.

About 98% of capacity is contracted under long-term, take-or-pay contracts with an average contract length greater than 10 years, Enbridge said.

Upon closing—expected in this year’s second quarter subject to regulatory approvals and conditions—Enbridge will contribute its wholly owned Rio Bravo pipeline project and $350 million in cash to the JV and will fund the first $150 million of the post-closing capex to complete the Rio Bravo pipeline project. Enbridge will receive a 19% equity interest in the joint venture and retain a 25% economic interest in Rio Bravo (subject to certain redemption rights of the joint venture partners).