Mr. Pat Murray reports

ENBRIDGE TO ENTER INTO JV CONNECTING PERMIAN BASIN NATURAL GAS SUPPLY TO GROWING LNG AND USGC DEMAND

Enbridge Inc. has entered into a definitive agreement with WhiteWater/I Squared Capital and MPLX LP to form a joint venture that will develop, construct, own and operate natural gas pipeline and storage assets connecting Permian basin natural gas supply to growing LNG (liquified natural gas) and United States Gulf Coast (USGC) demand.

Highlights:

• Acquiring a meaningful, strategic equity interest in the joint venture;
• Immediately accretive to discounted cash flow per share, with approximately 90 per cent contracted cash flows;
• Receiving immediate, recurring and growing cash flow from operating assets with minimal commodity exposure;
• Optimizes balance sheet by increasing EBITDA (earnings before interest, taxes, depreciation and amortization) and reducing Enbridge's share of future Rio Bravo pipeline project capital expenditures proportional to its economic interest in that project;
• Embedded organic expansion opportunities provides attractive growth options and diversifies offtake.

The joint venture will be owned by WhiteWater/I Squared (50.6 per cent), MPLX (30.4 per cent) and Enbridge (19 per cent), and will include the following assets:

• 100-per-cent interest in the Whistler pipeline, an approximately 450-mile, 42-inch intrastate pipeline transporting natural gas from an interconnect with the Waha header in the Permian basin to Agua Dulce in Texas, near the starting point of the proposed Rio Bravo pipeline;
• 100-per-cent interest in the Rio Bravo pipeline project, approximately 137 miles of new 42-inch and 48-inch pipelines transporting natural gas from the Agua Dulce supply area to NextDecade's Rio Grande LNG project in Brownsville, Tex.;
• 70-per-cent interest in the ADCC pipeline, an approximately 40-mile, 42-inch proposed intrastate pipeline designed to transport 1.7 billion cubic feet per day of natural gas from the terminus of the Whistler pipeline in Agua Dulce to Cheniere's Corpus Christi LNG export facility (the pipeline is expected to be in service in the third quarter of 2024 and is expandable up to 2.5 Bcf/d);
• 50-per-cent interest in Waha Gas Storage, an approximately two-billion-cubic-feet gas storage cavern facility, with additional topside facilities capable of injection and withdrawal.

Approximately 98 per cent of capacity is contracted under long-term, take-or-pay contracts with an average contract length of greater than 10 years. Approximately 90 per cent of counterparties are investment grade and include leading operators in the Permian basin.

Upon closing of the transaction, Enbridge will contribute its wholly owned Rio Bravo pipeline project and approximately $350-million (U.S.) in cash to the joint venture, and will finance the first approximately $150-million (U.S.) of the postclosing capex to complete the Rio Bravo pipeline project. Enbridge will receive a 19-per-cent equity interest in the joint venture and retain a 25-per-cent economic interest in the Rio Bravo pipeline project (subject to certain redemption rights of the joint venture partners).

"Acquiring a meaningful equity interest in an integrated Permian natural gas pipeline and storage network that is directly connected to our existing infrastructure at Agua Dulce through this JV with WhiteWater/I Squared and MPLX is very exciting. This is a great way to enhance our supersystem approach, bringing energy supply to places where it is needed most and providing last-mile connectivity to domestic and export customers," said Cynthia Hansen, executive vice-president and president, gas transmission and mid-stream, Enbridge.

Enbridge will be contributing its Rio Bravo pipeline project, which will extend the joint venture's current infrastructure to serve LNG and other customers on the USGC. Enbridge's share of the postclosing capex to complete the Rio Bravo pipeline project will be 100 per cent of the first approximately $150-million (U.S.) and, thereafter, proportionate to its aggregate economic interest in that project.

This transaction is expected to unlock future growth opportunities for Enbridge to connect sustainable natural gas production to export markets as part of its USGC strategy.

"The transaction optimizes our investment capacity by increasing the efficiency of our capital. We will begin receiving immediate cash flow and will share in future growth opportunities," said Pat Murray, executive vice-president and chief financial officer of Enbridge. "Having access to new Permian natural gas infrastructure enhances and increases the visibility of our medium-term growth outlook, while being accretive to our balance sheet."

Closing is expected in the second quarter of 2024, subject to the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

About Enbridge Inc.

Enbridge safely connects millions of people to the energy they rely on every day, fuelling quality of life through its North American natural gas, oil and renewable-power networks and its growing European offshore wind portfolio. The company is investing in modern energy delivery infrastructure to sustain access to secure, affordable energy and building on more than a century of operating conventional energy infrastructure and two decades of experience in renewable power. Enbridge is advancing new technologies, including hydrogen, renewable natural gas, carbon capture and storage, and is committed to achieving net-zero greenhouse gas emissions by 2050.

We seek Safe Harbor.