Enbridge Expects $8 Billion in Capital Items to be Placed in Service This Year

Researched by Industrial Info Resources (Sugar Land, Texas)--Oil and gas pipeline company Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) expects to reap the benefits next year of more than C$10 billion (US$8 billion) of capital that it placed into service in 2021.

"This capital, along with embedded growth in each of our businesses, will drive significant free cash flow growth and approximately C$5 billion to $6 billion (US$4 billion to $4.8 billion) of annual investable capacity to redeploy into our business," Chief Executive Officer Al Monaco said in an earnings-related press release last week.

Industrial Info is tracking more than US$7.4 billion worth of active Enbridge projects, including US$5 billion in the U.S. and US$2.4 billion in Canada.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipeline, Oil & Gas Production, Terminals and Alternative Fuel project databases can click here for a list of detailed reports.

Click on the image at right for a graph showing Enbridge's project spending in the top 10 states/provinces.

The company reported C$1.2 billion (US$1 billion) in adjusted earnings for the just ended third-quarter, compared with C$1 billion (US$800 million)in the same quarter of 2020.

Capital projects placed into service since mid-2021 include Enbridge's long-awaited Line 3 Replacement Project, which restores the pipeline's capacity to 760,000 barrels per day (BBL/d) of crude oil and increases deliveries from Canada to U.S. refineries. The Minnesota segment of Line 3 follows other segments already placed into service in Canada, North Dakota and Wisconsin. Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipelines Project Database can click here for the project report on the Minnesota segment.

Enbridge continues with its expansion into U.S. Gulf Coast oil and gas markets. In October, Enbridge completed its US$3 billion acquisition of Moda Midstream Operating Limited Liability Company's (Houston, Texas) Ingleside Energy Center crude oil-export terminal near Corpus Christi, Texas. Billed as the largest crude export terminal in the U.S. by volume, the terminal consists of 15.3 million barrels of storage and 1.6 million BBL/d of export capacity.

The terminal receives crude oil from the Permian Basin and Eagle Ford shale play, connected by 3 million barrels per day of pipe capacity, and is capable of loading very large crude carriers (VLCCs).

"It's clear that the Permian is among the most competitive basins globally, and its scale, low break-evens, and proximity to markets means it's essential in any transition scenario," Monaco said during the company's third-quarter earnings conference call with industry analysts on November 5.

"So as you know, we were the first ones to build that path of the heavy (crude oil) barrels into the Gulf Coast over the last several years," Monaco said. "This was really about now covering the light oil side and we're so happy about this because of the sheer competitiveness of the Permian and Eagle Ford on global market scale."

For related information, see February 17, 2020, article - Canada's Enbridge Moves to Extend Reach into U.S. Gulf Coast Energy Markets.

Meanwhile, court battles continue over Enbridge's Line 5 pipeline, which ships 540,000 BBL/d of crude oil and refined products from Superior, Wisconsin, to Sarnia, Ontario. Michigan ordered Enbridge to shut it down due to worries a leak could develop in a four-mile section running beneath the Straits of Mackinac in the Great Lakes. Enbridge wants to build a new utility tunnel under the Straits of Mackinac to house a replacement for Line 5. Subscribers can click here to learn more about the replacement tunnel project.

"The fact is Line 5 and the tunnel are essential to Michigan, but also the entire region and two Canadian provinces," Monaco said, adding, "Independent experts concluded there's no practical alternative to Line 5 other than thousands of more rail cars and trucks."

Michigan's 12 federally recognized tribes sent a letter to President Joe Biden on Friday, asking him to support the state's effort to shut down Line 5. The White House had yet to respond as of Monday.

For related information, see March 5, 2021, article - Enbridge, Michigan Governor Clash Over Line 5 Oil Pipelines as Canada Weighs In, an Industrial Info Market Brief.

Enbridge plans to release details of its 2022 capital expenditures plan at its investor day event on December 7.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.