Enbridge Inc. says it has completed a deal that will see the Calgary-based pipeline giant become operator of the Gray Oak oil pipeline in Texas.

Enbridge says its joint venture merger deal with Houston-based energy company Phillips 66 will result in a single joint venture holding both companies' indirect ownership interests in Gray Oak, as well as DCP Midstream LP, a Denver-based natural gas company.

Under the terms of the deal, Enbridge will increase its indirect economic interest in Gray Oak to 58.5 per cent from 22.8 per cent. Enbridge will also reduce its indirect economic interest in DCP Midstream to 13.2 per cent from 28.3 per cent.

Enbridge says the merger will result in an approximately US$400-million cash payment to Enbridge from the merged entity.

The Gray Oak pipeline is a 1,367-kilometre pipeline capable of shipping 900,000 barrels per day of oil from the Permian Basin to the U.S. Gulf Coast.

Enbridge has been aiming to expand its presence in the U.S. Gulf Coast, and in 2021, the company acquired the Ingleside Energy Center — the largest crude export terminal in North America — located near Corpus Christi, Texas.