March 1 (Reuters) – Enbridge Inc (ENB.TO) will invest C$3.3 billion ($2.42 billion) in natural gas and liquids infrastructure and in renewable power this year and expects an annual core earnings growth rate of 4% to 6% through 2025, the Canadian company said on Wednesday.

The Calgary, Alberta-based pipeline operator said it would buy a gas storage facility in Tres Palacios in the U.S. Gulf of Mexico coast region for $335 million to strengthen its liquefied natural gas (LNG) export business.

The deal, expected to close in the second quarter, looks to tap into high demand for North American LNG exports after Western sanctions on major producer Russia following its invasion of Ukraine squeezed a tight global supply.

The Tres Palacios gas storage facility currently has a capacity of about 35 billion cubic feet and serves gas-fired power generation in Texas and Mexico.

The company said the investment will also include gas transmission modernization capital totaling C$2.4 billion.

The pipeline operator has also decided to proceed with the construction of the Enbridge Houston Oil Terminal for an initial capital cost of $240 million.

Enbridge also committed $1 billion to Divert Inc, a U.S-based company that converts food waste to energy, the latest in a string of investments by major energy companies in biogas, which can replace traditional natural gas but is more costly to produce.

“We will continue to maintain the flexibility to execute on other accretive, value-enhancing activities such as tuck-in acquisitions and returning additional capital to shareholders,” Chief Executive Greg Ebel said in a statement.

The company had earlier said it expects to deploy about C$6 billion of capital in 2023, inclusive of maintenance capital.

($1 = 1.3585 Canadian dollars)

Reporting by Sourasis Bose in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila

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