Enbridge Outlines Spending Spree, Ups Growth Forecast

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Canada-based midstream company Enbridge (NYSE:ENB) (Calgary) said it would invest US$500 million on pipeline and storage along the U.S. Gulf Coast, while at the same time raising its own growth forecast.

Enbridge announced ambitious capital commitments for pipeline and storage along the U.S. Gulf Coast. It plans to spend a combined US$100 million on adding another 120,000 barrels per day (BBL/d) in capacity to its Gray Oak Pipeline, along with an additional 2.5 million barrels of storage at its Enbridge Ingleside Energy Center (EIEC) in Corpus Christi, Texas.

Elsewhere, another US$200 million goes toward the acquisition from Flint Hills Resources of two marine docks and associated land next to the EIEC terminal. Additional investments support offshore pipelines to service the Sparta development in the deep waters of the Gulf of Mexico.

Shell plc (NYSE:SHEL) (London, England) and Equinor (NYSE:EQNR) (Stavanger, Norway) made a final investment decision (FID) on Sparta in December. The field is expected to produce 100,000 BBL/d once operations begin in 2028. Subscribers to Industrial Info's Oil & Gas Production Project Database can click here for the related project reports. For more information, see December 21, 2023, article - Shell Reaches FID for Sparta Development in the Gulf of Mexico.

"At Enbridge, we're building out our integrated infrastructure super systems, to enable the continued delivery of energy in a planet-friendly way, everywhere people need it" said President and Chief Executive Officer Greg Ebel.

Gray Oak will expand capacity in its Permian "super system." Additional storage, meanwhile, will expand the capacity at EIEC to around 20 million barrels by 2025.

"The timely addition of storage tanks at Ingleside supports higher crude throughput by ensuring customers have on-demand access to their export-ready crude supply," the company said.

Enbridge boasts the largest pipeline network in North America. EIEC, meanwhile, is the largest oil storage and export facility by volume in the United States. All told, Enbridge transports about 30% of the crude oil produced in North America, as well as nearly 20% of the total natural gas consumed in the continental United States.

Corpus Christi, home to the EIEC facility, accounts for the bulk of U.S. crude oil exports. Crude oil exports over the four-week period ending February 23 averaged 4.4 million BBL/d, an 8.4% increase over the same period last year.

Exports may be stifled by a lack of pipeline capacity and growing competition overseas, but expansions along the Gulf Coast could offset that.

Enbridge reported a profit of US$1.29 billion during the fourth quarter, offsetting a loss during the same period in 2022. Earnings per share, however, came in below analyst expectations.

Nevertheless, the company said it was expecting earnings before interest, taxes, depreciation and amortization (EBITDA), a metric of operating performance and cash flow, to increase by 7-9% through 2026. Investments in the range of US$6 billion are expected on secured projects.

"The visibility, duration, and low-risk profile of our growth, which underpins our growing dividend, is stronger than ever," Ebel said.

Shares for Enbridge were in the black on Wednesday after the company's announcement.

Industrial Info is tracking 103 Enbridge capital projects, worth US$14.73 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a list of detailed project reports.

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 US$17.8 Trillion (USD).