Enbridge takes 5 percent stake in planned offshore LNG project

An LNG tanker (Tomohiro Ohsumi/Bloomberg)
An LNG tanker (Tomohiro Ohsumi/Bloomberg)

Pipeline giant Enbridge Inc has agreed to buy a 5 percent equity stake in a proposed offshore, Gulf of Mexico natural gas export facility.

Houston’s Fairwood Peninsula Energy Corp., which owns the liquefied natural gas or LNG project, said Wednesday that the pipeline company had purchased the small stake and agreed to assist in the development of its Delfin LNG project.

Delfin applied in 2013 for permission to export up to 13 million metric tons per year of LNG. The first planned phase of the project would bring online a capacity of about 8 million metric tones per annum.

If built to current plans, Delfin would ultimately put four or more floating liquefaction vessels about 50 miles off Louisiana’s coast in the Gulf of Mexico. The liquefied gas would then be shipped overseas to customers around the world.

More than a dozen LNG projects are moving forward simultaneously across the U.S., as producers look for ways to get their gas to higher-priced markets in Asia and Europe. Industry experts have said it’s unlikely all will be built – as costs can easily run into the billions of dollars for larger projects.

Fairwood didn’t put a dollar amount on Enbridge’s 5 percent stake.

Enbridge’s relationship with Fairwood and the Delfin project goes back to 2012, when the pipeline giant sold the LNG company a pipeline that runs from Louisiana’s costal Cameron Parish to the offshore area where the floating liquefaction trains would be stationed.

Calgary, Alberta-based Enbridge, which runs its U.S. operations from Houston, has built a business mostly shipping crude oil across North America. But the company in recent years has put some focus on building out its natural gas operations. In 2013, Enbridge created a limited-parnter subsidiary Midcoast Energy Partners and tasked it with building out its natural gas and natural gas liquids infrastructure.

“As part of the development agreement, we will bring our expertise to the table regarding pipeline project management, pipeline operations and sourcing gas to facilities,” said Dave Weathers, Enbridge U.S.’s vice president of development, in a written statement.