Canada's Enbridge Upbeat About Its Future

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Raising its guidance on financials for 2025, Canadian energy company Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) said it's well positioned to address the expected surge in demand from North America.

Global consumption of liquid fuels is expected to post a 1 million barrel per day (BBL/d) increase in 2024, the U.S. federal government estimated, and another 1.2 million BBL/d in 2025.

And while U.S. President-elect Donald Trump has pledged stiff tariffs on North American trading partners, Greg Ebel, the president and chief executive officer (CEO) at Enbridge, said his company was well positioned to meet the growing global demand for both crude oil and natural gas.

The latter, he said, is driven by an increase in liquefied natural gas (LNG) and the switch from coal- to gas-fired power. Acquisitions this year helped the company build up its position in the U.S. natural gas utilities sector.

"As the world navigates a dynamically shifting macro backdrop, Enbridge will continue to play a leading role delivering safe, reliable and affordable energy," Ebel said on Tuesday.

Enbridge has a deep and diverse bench. Its 1,100-mile-long Alberta Clipper pipeline is designed to deliver 800,000 barrels of crude oil per day from Alberta to a terminal in Wisconsin. On the cleaner side, it has a 40% stake in the Neal Hot Springs plant in Oregon, a 22-megawatt (MW) geothermal facility.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), an alternative measure of financial performance, was $9.6 billion over the nine months ending September 30, a 9.3% improvement over the same period last year.

Looking ahead, Enbridge said it raised its full-year guidance for EBITDA in 2025 by 17% to between $13.8 billion and $14.2 billion. CEO Ebel said the improvement was driven largely by the recent acquisition of U.S. gas utilities.

"Enbridge's business model is designed to succeed and deliver reliable cash flow in all market cycles," he added. "We are pleased to announce a 3% increase to the common share dividend, marking the 30th consecutive annual increase."

Ebel made no mention of the proposed 20% tariff on goods imported from Canada from U.S. President-elect Trump, tariffs he said would include energy.

Enbridge pipelines such as Alberta Clipper help meet demand from the regional U.S. refineries geared to process the heavy type of oil that's dominant in Canada. Canadian Prime Minister Justin Trudeau visited the incoming U.S. president at his Mar-a-Lago estate in Florida to discuss the issue amid outcry from provincial and federal leaders.

Last week, Mark Scholz, the president and CEO of the Canadian Association of Energy Contractors (CAOEC), added that Trump's plans could have "profound implications" for a Canadian economy heavily dependent on the revenue from exports. The United States is Canada's top trading partner and the main destination for its crude oil.

Enbridge may be somewhat insulated due to a diverse portfolio. Outside of Canada, it holds a 13.2% interest in DCP Midstream (Denver, Colorado), which has more than 5,600 miles of natural gas liquids pipelines in Colorado, Kansas, Louisiana, Michigan, New Mexico, Oklahoma and Texas.

The national concern, however, suggests Enbridge is still vulnerable to tariffs.

"The looming threat of across-the-board tariffs on all exports is the most immediate concern, but longer-term key issues such as the renegotiation of the Canada-U.S. Free Trade Agreement (CUFSA) and the pursuit of tariff carve-outs will be immediate points of concern that will require an all-of-industry response," Pierre Alvarez, a former president of the Canadian Association of Petroleum Producers, wrote for CAOEC.

Trump brokered the free-trade agreement with Canada during his first term in office.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).