Enbridge is Upbeat about its Future

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Canadian energy company Enbridge said it has a huge backlog of projects to clear out of its inventory. That comes as Canadian budget proposal aims to steer oil revenue toward nation-building projects.

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US$27 billion Backlog for Enbridge

Canadian energy company Enbridge said Friday that the global focus on energy security reinforced is value, while national efforts to become an energy superpower gained traction with a national budget proposal.

"The global focus on energy security, reliability and affordability continues to reinforce the value of Enbridge's strategically positioned infrastructure," said Greg Ebel, the company's president and chief executive officer.

Industrial Info is tracking the multi-million-dollar midstream portfolio of Enbridge across North America. Among the largest projects by investment value is associated with an optimization of its Line 26 network. The optimization project in Manitoba would see construction of 80 miles of pipeline to transport 250,000 barrels of crude oil per day (bpd), data show. Line 26 runs from North Dakota to Manitoba.

In the U.S. market, Enbridge this year acquired the crude oil business from Tallgrass Energy, taking on a majority interest in the Pony Express pipeline.

"Pony Express is a 460 kbpd highly contracted crude oil system serving the Bakken, Powder River and Denver-Julesburg basin supply zones with connectivity into the Cushing, OK demand hub," the company explained.

Many of its pipelines cross the U.S.-border, with oil pipelines crossing Michigan to deliver product to refineries in Sarnia, Ont.

Adjusted earnings for Enbridge were up nearly 8% year-on-year to reach US$768 million. Energy companies in general are turning in banner performances in the third quarter due to the geopolitical risk premium for crude oil prices, which support their revenue streams and production gains. Calgary-based Athabasca Oil already said its production in the third quarter marked a 20% increase from the prior three-month period.

Enbridge too is on a growth trajectory. It said it put US$2.1 billion worth of projects in service during the third quarter and still has a backlog of around US$27 billion.

Growth Matches National Ambitions

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That, in turn, is paying off for a broader economic agenda in Canada. On Thursday, Prime Minister Mark Carney laid out a budget that would use windfall oil revenue to build out Canadian infrastructure over the next five years.

Francois-Philippe Champagne, the country's finance minister, would steer some of that toward nation-building projects outlined early this year by the prime minister, including the Pacific Link crude oil pipeline to British Columbia.

"This federal government is finally moving closer to what Alberta has tirelessly advocated for: a stronger economy and a competitive energy sector that underpins prosperity for all Canadians," provincial Finance Minister Jason Nixon said.

Alberta had mulled a referendum for independence as part of an effort to exert more control over its vast oil-riches, though it failed.

Pacific Link is part of a package of energy initiatives aimed at reducing Canada's trade dependence on the United States. Data from Industrial Info Resources show it would carry around 1 million bpd and likely follow a similar path as Trans Mountain, the only network currently able to deliver Canadian crude oil outside of the continent from the coast of British Columbia.

Plans for Pacific Link could be altered by the rejection of a proposal to overturn a ban on large crude oil tankers off the coast of British Columbia. With Conservatives taking power in recent municipal elections, the government-elect of the western province said it was unreasonable to support a ban while tankers booked by U.S. companies were traversing a similar route for Alaskan crude.

The budget, and its support for the oil and gas industry, was lauded by the Canadian Association of Petroleum Producers, which said the sector is part of the backbone of the Canadian economy.

"Canada's oil and natural gas industry is ready to help grow our prosperity by creating well-paying jobs, generating government revenues and supplying responsibly produced energy to Canadians and our trading partners," said Lisa Baiton, the group's president and CEO.

Key Takeaways

• Enbridge ambitions line up with a national economic agenda in Canada
• A budget proposal in Canada aims to use oil revenue for infrastructure

By the Numbers

• 1 million bpd from newly-proposed Pacific Link pipeline to British Columbia
• 8% year-on-year increase in adjusted earnings for Enbridge

About Industrial Info Resources

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 verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).