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Both the demand for natural gas—and increasing Permian Basin production— is a vindication for Enbridge’s strategy to expand in the region, according to the company’s CEO.
On May 6, the company was part of a joint announcement for a pending ownership change of the Matterhorn Express Pipeline, the newest gas egress pathway out of the Permian.
During Enbridge’s first-quarter earnings call, Enbridge CEO Greg Ebel said that, current volatility notwithstanding, natural gas egress out of the Midland and Delaware basins is in demand.
“Matterhorn's a project that's already in service, but, look, you're seeing GORs (gas-to-oil ratios) go up in the Permian,” Ebel said. “The need for gas takeaway is absolute, regardless if you think there's going to be a slowdown in production or a leveling out of production.”
In the deal, Enbridge, which did not have a stake in the Matterhorn Express, agreed to buy a 10% stake in the line for $300 million, according to company statements. The Matterhorn has a designed capacity of 2.5 Bcf/d for natural gas and analysts estimate the value of the line at about $5 billion.
MPLX increased its stake from 5% to 10%, while I Squared Capital became the new financial backer behind WhiteWater Midstream’s 65% stake. ONEOK owns the remaining 15%.
On May 6, Devon Energy announced it was selling its 12.5% stake in the Matterhorn for $375 million but did not name the buyer.
Enbridge sees other opportunities for Permian development, and building the areas natural gas egress will help the crude production as well, Ebel said.
“The gas pricing is quite productive in terms of actually building takeaway and serving as a minor, but an important, buffer to a weaker price on the oil side as well,” he said.
Enbridge is also part of the JV that sanctioned the construction of the Traverse Pipeline in April. The line will provide 1.75 Bcf/d of bi-directional capacity to move natural gas between processing terminals in near Corpus Christi, Texas, and Houston.
‘Ready to rock in Canada’
Ebel was also positive about the outcome of the April 28 election in Canada. New Prime Minister Mark Carney has said he is committed to building pipelines across the country, including areas where voters have resisted projects in the past.
“We’re ready to rock, I think, in Canada,” Ebel said. “It’s just that someone’s going to put the policies in place so the industry can deliver for both consumers and investors.”
Enbridge has been working with policymakers and regulators to advocate for new infrastructure, he said.
Financially, the company reported GAAP earnings of $2.3 billion in the first quarter, compared to earnings of $1.4 billion during the same period in 2024. The company’s overall gas transmission was 13% higher than the year before, thanks to a growing footprint, Ebel said.