Enbridge Plans C$3.3 Billion in Investments, Targets Earnings Growth

By Robb M. Stewart

Enbridge Inc. plans more than 3 billion Canadian dollars (US$2.2 billion) in fresh investments and acquisitions to strengthen its energy infrastructure and help drive earnings growth in the coming years.

Ahead of a meeting with investors, the multinational pipeline and energy company said it would make C$3.3 billion in investments that would grow its backlog to C$17 billion across each of its business areas and 15 projects.

The secured capital program would help drive projected per-share earnings growth at an average annual rate of 4% to 6% over the 2022 to 2025 planning period, with expected growth of about 5% after that, the Calgary, Alberta, company said.

The proposed investment includes adding C$2.4 billion of new gas transmission modernization and utility capital to Enbridge's secured capital program, the company said.

Greg Ebel, Enbridge's president and chief executive, said the company's financial position has never been stronger and Enbridge expects to continue to have about C$6 billion of annual investment capacity, the majority of which will be targeted toward utility-like investments within the four core businesses. He said the company would maintain the flexibility for other activities, such as "tuck-in" acquisitions and returning additional capital to shareholders.

Enbridge said it is negotiations with shippers for incremental contract capacity on the Flanagan South Pipeline system.

The company said it will proceed with the construction of the Enbridge Houston Oil Terminal for an initial capital cost of C$240 million. The terminal, located adjacent to the terminus of the Seaway Pipeline, will provide shippers with a storage terminal primarily focused on heavy crude.

As well, Enbridge said it has entered into a definitive agreement with Brookfield Infrastructure Partners and Crestwood Equity Partners LP to buy Tres Palacios Holdings LLC for US$335 million. Tres Palacios is located in the U.S. Gulf Coast region and its natural gas infrastructure serves Texas gas-fired power generation and increasing liquefied natural gas exports, as well as growing need in Mexico.

Enbridge said it also is acquiring a 10% stake in Divert Inc., a food-waste management company expanding into renewable natural gas to help food retailers manage waste more sustainably, for US$80 million. The agreement includes further investment opportunities to develop wasted-food-to-RNG projects across the U.S., it said.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

March 01, 2023 08:03 ET (13:03 GMT)

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