The Daley Note: March 10, 2023
Enbridge (ENB) held its annual investor day on March 1, announcing a slew of new liquids projects poised to benefit from growing US Gulf Coast exports. One project East Daley Analytics will be watching closely is a proposed 200 Mb/d expansion and extension of the Gray Oak Pipeline to Houston.
Data from our Crude Hub Model shows utilization on Permian-to-Corpus pipelines hit 90% in December 2022, leaving only ~250 Mb/d of unused pipe capacity before shippers max out current infrastructure. Many of these pipes have seen utilization rates steadily increase over the last year as Corpus Christi becomes the preferred Gulf Coast export market for US crude oil supply.
If expanded, Gray Oak would play a key role in attracting incremental Permian supply into Corpus Christ, as well as offering connectivity to potential new offshore Houston export facilities, such as the SPOT project ENB is jointly developing with Enterprise Products (EPD).
Enbridge’s focus on the Permian and Gulf Coast continues to be a theme. Over the last year and a half, the company has completed a handful of transactions to increase its Permian and Gulf Coast crude exposure:
- Enbridge Ingleside Energy Center (EIEC, formerly MODA Midstream) – $3 billion (4Q21)
- +35.7% Gray Oak Pipeline – Reduced economic interest in DCP (3Q22)
- +10% Cactus II -- $265 million (4Q22)
Currently, these assets are some of the most utilized in the basin, and EIEC is the largest Gulf Coast oil export facility, moving more than 800 Mb/d at YE22, based on Crude Hub Model data. – AJ O’Donnell Tickers: ENB, EPD.
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