(Reuters) — Canadian pipeline operator Enbridge said on Tuesday it would form a venture with I Squared Capital and pipeline firms WhiteWater and MPLX to connect Permian supplies to the U.S. Gulf Coast to tap into strong LNG demand for exports.
Enbridge will have a 19% stake, WhiteWater and I Squared a combined 50.6% stake while MPLX will hold 30.4% in the venture. The deal is expected to close in second quarter.
U.S. was the largest exporter of LNG in 2023 with several new export facilities expected to come online by the end of the decade.
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The JV would include 100% interests in Enbridge's wholly-owned Rio Bravo Pipeline, which connects to NextDecade's Rio Grande LNG project in Brownsville, Texas, and the Whistler pipeline, which transports natural gas from the Permian to nearly the starting point of the Rio Bravo pipeline.
It will also have a 70% interest in the proposed ADCC pipeline that would connect to Cheniere Energy's Corpus Christi LNG export facility and a 50% interest in the Waha Gas storage.
Enbridge will fund the first $150 million of the post-closing capital to complete the Rio Bravo project. It will also provide $350 million in cash to the venture.
The Permian is largest U.S. oil shale patch and Enbridge has disclosed plans to expand its capacity in the basin.