‘We think that there is definitely more to come’: Strategic JV announcement has brought further growth opportunities like the Traverse Pipeline
This wasn’t just whistling in the dark.
The Whistler pipeline system provided Enbridge an entrance into the natural gas fields of the Permian Basin—where we already had significant ownership interest in long-haul oil pipelines, like Gray Oak and Cactus II, transporting West Texas light crude to the U.S. Gulf Coast.
A year later, Enbridge still sees the Permian as a prize.
“We’ve had our eye on that Permian gas for a long time, and we waited patiently for an entry point like this,” Cynthia Hansen, Enbridge’s Executive Vice President and President of our Gas Transmission Business, recently said of a March 2024 joint venture announcement between Enbridge, WhiteWater/I Squared Capital and MPLX LP.
“It supports that Permian buildout, to get that gas to growing demand along the Gulf Coast, and to support LNG (export) growth there too,” said Ms. Hansen during our Enbridge Day investor community conference on March 4 in New York.
“These assets are connected directly to our existing infrastructure, and they come with embedded growth opportunities. We’re going to take a very disciplined approach, but we are excited about these growth opportunities that have been unlocked so far—and we think that there is definitely more to come.”
As part of that March 2024 announcement, the joint venture between Enbridge (19.0%), WhiteWater/I Squared (50.6%) and MPLX (30.4%) included a handful of assets:
- A 100% interest in the 450-mile Whistler Pipeline, a 42-inch-diameter line bringing natural gas from the Permian to Agua Dulce, TX, near the starting point of the proposed Rio Bravo Pipeline.
- A 100% interest in the Rio Bravo Pipeline project, a 137-mile line which will bring natural gas to NextDecade’s Rio Grande LNG project in Brownsville, TX.
- A 70% interest in the ADCC Pipeline, a 40-mile line that entered service in July 2024 and transports up to 1.7 Bcf/d of gas from Whistler’s endpoint to Cheniere’s operating Corpus Christi LNG export facility near Corpus Christi, TX.
- A 50% interest in the 2.0 Bcf Waha Gas Storage facility in Pecos County, TX connecting to key Permian egress pipelines, including Whistler.
As part of the arrangement, Enbridge retained an effective 39% interest in the Rio Bravo Pipeline project.
Embedded growth opportunities soon followed:
“We were able to partner with a strong developer and operator . . . to make that investment in the Whistler system, which is a great network for gas and storage,” said Ms. Hansen on March 4.
“We’re really excited that we were able to partner with such a strong developer . . . but we’ll still look at those opportunities where we can directly participate. It’s going to be incumbency, where you have that ability to connect, your ability (for) brownfield opportunities. All of that is going to be important.”
In the past three years, Permian-associated gas production has grown at twice the rate of oil in a region that not only ranks as the highest-producing oil field in the U.S., but the largest oil reserve on the planet.
“The Permian is a very prolific supplier basin, and is expected to grow. I think estimates are another 5 Bcf” per day by 2040, said Ms. Hansen.
The Whistler JV “positions us well to really look at all these opportunities.”
