CALGARY,
AB, March 1, 2023 /CNW/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) is providing an
update on its strategic priorities and financial outlook, which
will be further discussed at the Company's investor conference
today in Toronto. A virtual broadcast of the event is also
available for registered participants.
Highlights
- Four growing businesses with best-in-class first-choice
franchises
- Visible $3+ billion of annual investment in natural gas
infrastructure, $1+ billion in liquids infrastructure, and $1+
billion in renewable power generation
- New Energy Technology team advancing contracted infrastructure
in Renewable Natural Gas ("RNG"), Carbon Capture and Sequestration
("CCS") and Hydrogen in the U.S. and Canada
- Expected average annual growth rate of 4%-6% in EBITDA and
earnings per share ("EPS") and ~3% DCF per share over the 2022-2025
Plan period
- Expected average annual growth rate of ~5% post 2025 for
EBITDA, DCF and EPS
- Internally generated financial capacity for investment after
dividends of ~$6 billion per year on
average over the Plan period, while maintaining a strong balance
sheet
- Announced $3.3 billion of new
accretive investments including:
-
- Adding $2.4 billion of new gas
transmission modernization and utility capital to our secured
capital program which will be added to rate base and drive earnings
and cash flow growth
- Announced the intention to undertake a binding open season for
up to 95 kbpd on our Flanagan South Pipeline system ("FSP") which
is expected to begin in March
- In combination with the FSP open season, Enbridge today
announced plans to construct the Enbridge Houston Oil Terminal
("EHOT") for a capital cost of US$240
million which is expected to have an initial capacity of 2.5
MMbbls of storage with potential to expand capacity up to 15
MMbbls
- Entered into an agreement to acquire 35 Bcf of premium Gulf
Coast gas storage assets ("Tres Palacios") for US$335 million, further supporting our customers
and our U.S. Gulf Coast LNG export strategy
- Entered into an agreement to invest US$80 million in a leading RNG infrastructure
company - Divert Inc.
- Gas Distribution and Storage is moving forward with a plan to
build a pipeline to supply ArcelorMittal Dofasco in Hamilton, Ontario with natural gas, supporting
the largest GHG emissions reduction project in the province
CEO Comment
Commenting on the Company's outlook, Greg Ebel, President
and CEO of Enbridge, noted:
"Our asset positions, cost advantages and, increasingly, our
ability to deliver integrated conventional and lower-carbon
solutions makes Enbridge the first-choice for energy delivery by
our customers. Above all, our leading track record on operational
safety and reliability differentiates us and will always be our top
priority. This relentless focus, along with our premium growth and
low-risk business model, also positions us as the first-choice
investment opportunity among our peers.
"The world continues to navigate the energy trilemma of
reliability, sustainability and affordability and our premier
franchises across the energy system increasingly play a critical
role in balancing these objectives.
"As we look to the future, absolute energy demand of all types
is expected to grow for decades. We continue to build on our
integrated 'super system' to serve today's and tomorrow's growing
domestic and export market demand. Our extensive footprint uniquely
positions us to capture ongoing growth in conventional energy
infrastructure including renewable power, while also playing a
leadership role in New Energy Technology investments and the energy
transition.
"With today's announcement of $3.3 billion of new
accretive investments, we have further advanced our strategy. This
includes expanding our USGC footprint through investments in oil
and gas storage and furthering our RNG strategy by investing in
Divert Inc., a leading RNG infrastructure company. It also includes
another year of modernization on our Gas Transmission systems
including the East Tennessee Natural Gas System Alignment Program
as well as extending our growth program at our Gas Distribution and
Storage business by another year. In combination with the
$8 billion of new projects in 2022,
our secured backlog now stands at $17
billion across all four businesses and 15 discrete, highly
executable projects.
"Through 2025, we expect to grow EPS and EBITDA by a compound
annual growth rate ("CAGR") of 4-6% driven by new contributions
from our secured capital program, embedded revenue escalators and
continued focus on productivity enhancements. Based on current cash
tax assumptions, annual DCF per share growth is expected to grow
less rapidly than other metrics, averaging ~3% through 2025.
Importantly, this outlook will allow us to comfortably extend our
long track record of ongoing annual dividend growth.
"Our financial position has never been stronger, and we expect
to continue to have approximately $6
billion of annual investment capacity. We'll deploy this
prudently, maintaining our disciplined capital allocation. We
expect the majority will be targeted towards our capital efficient
and utility-like investments within our four core businesses but we
will continue to maintain the flexibility to execute on other
accretive, value-enhancing activities such as tuck-in acquisitions
and returning additional capital to shareholders.
"We're well positioned for the energy transition and our
demonstrated leadership on ESG helps to support the base business
and future growth. In 2020, we established a number of ESG goals
including reducing operational emissions to Net Zero by 2050, and
improving the diversity of our workforce, Board and supply chains.
Our people have rallied around these commitments and our early
results reflect a focus on continuous improvement and alignment
across enterprise-wide business plans.
"We believe that our strategic and financial plan continues to
provide investors with a first-choice investment opportunity
combining highly predictable cash flows, an attractive growth
outlook, and a predictable return of capital to shareholders.
"The strength of our core businesses, disciplined approach to
capital allocation and strong balance sheet places us in a great
position to meet growing energy demand safely, reliably, affordably
and sustainably. At Enbridge, Tomorrow is On!"
NEW GROWTH PROJECTS AND
INVESTMENTS
Flanagan South Open Season and EHOT construction further
export strategy
In support of growth in our Liquids business, Enbridge is
progressing negotiations with shippers for incremental contract
capacity on the Flanagan South Pipeline system. Enbridge expects to
leverage available capacity on FSP to secure up to 95kbpd of
commitments through an open season scheduled to be held later this
month. Not only would these new volumes increase secured
throughput on Flanagan South, they
would also secure long-haul demand on the entire Enbridge network
out of Western Canada.
In addition, to facilitate the additional commitments on FSP,
along with other FSP shippers, Enbridge has decided to proceed with
the construction of the Enbridge Houston Oil Terminal for an
initial capital cost of $240 million.
The greenfield terminal, located adjacent to the terminus of the
Seaway Pipeline, will provide shippers with a premier full-service
storage terminal primarily focused on heavy crude. The
facility will have access to the Houston region refining complex and export
opportunities through the Seaway docks at Freeport and Texas
City, as well as future access to Enterprise Products
Partner L.P.'s Sea Port Oil Terminal ("SPOT") (subject to that
project proceeding). Initial build of EHOT is expected to have
2.5MMbbls of storage, with an ultimate capacity of 15MMbbls once
fully built out and will be underpinned by long-term take-or-pay
contracts. The terminal will further Enbridge's U.S. Gulf
Coast strategy and create additional optionality for Enbridge and
its customers, while further strengthening the Mainline/FSP/Seaway
value chain.
Enbridge to acquire Tres Palacios Gas Storage, advancing
U.S. Gulf Coast strategy
Enbridge announced today that the Company has entered into a
definitive agreement with Brookfield Infrastructure Partners
(NYSE:BIP) and Crestwood Equity Partners LP (NYSE:CEQP) to acquire
Tres Palacios Holdings LLC for US$335
million. The transaction is expected to be accretive in its
first full year of ownership.
Tres Palacios is strategically
located in the U.S. Gulf Coast region and its critical natural gas
infrastructure serves Texas
gas-fired power generation and increasing LNG exports, as well as
the growing market need in Mexico.
Tres Palacios also owns an
integrated 62-mile natural gas header pipeline system, with eleven
inter and intrastate natural gas pipeline connections, including
Enbridge's Texas Eastern Pipeline.
Tres Palacios is comprised of
three natural gas storage salt caverns with a total
FERC-certificated working gas capacity of approximately 35 Bcf, as
well as an expansion project in execution for a fourth cavern that
will increase working gas capacity by approximately 6.5 Bcf, which
is fully contracted and in the permitting phase.
The transaction is expected to close in the second quarter of
2023, subject to receipt of customary regulatory approvals and
closing conditions.
Enbridge invests in leading RNG company, Divert Inc.
Enbridge is acquiring a 10% stake in Divert Inc, a leading food
waste management company expanding into RNG to help major food
retailers manage their waste more sustainably, for US$80 million. The agreement includes further
investment opportunities to develop wasted-food-to-RNG projects
across the US providing line of site to greater than $1 billion of new capital growth which will be
underpinned by long-term take-or-pay contracts.
Enbridge expects to close the transaction in March 2023.
Hamilton Growth Project
Enbridge is planning to build a 14km natural gas pipeline to
support ArcelorMittal Dofasco's plan to change the way it makes
steel, eliminating coal as a fuel for ironmaking. This is the
largest GHG emissions reduction project underway in Ontario and is expected to reduce emissions by
60% from today. In 2024, Enbridge plans to file a Leave to
Construct application with the Ontario Energy Board.
Details of Enbridge's Investor Conference
Enbridge's investor conference will be held today at 6:30
a.m. MT (8:30 a.m. ET).
The conference will be webcast live at Link.
Details of the webcast:
When:
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Wednesday, March 1,
2023
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6:30 a.m. MT (8:30 a.m.
ET) to 10:00 a.m. MT (12:00 p.m. ET)
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Webcast:
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Sign-up
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Presentations and supporting materials are posted on Enbridge's
website in 'Events and Presentations'.
A webcast replay will be available by 4:00 pm ET on
Wednesday, March
1st and a transcript will be posted to
Enbridge's website approximately 48 hours after the event.
About Enbridge
Inc.
At Enbridge, we safely connect millions of people to the
energy they rely on every day, fueling quality of life through our
North American natural gas, oil or renewable power networks and our
growing European offshore wind portfolio. We're investing in modern
energy delivery infrastructure to sustain access to secure,
affordable energy and building on two decades of experience in
renewable energy to advance new technologies including wind and
solar power, hydrogen, renewable natural gas and carbon capture and
storage. We're committed to reducing the carbon footprint of the
energy we deliver, and to achieving net zero greenhouse gas
emissions by 2050. Headquartered in Calgary, Alberta,
Enbridge's common shares trade under the symbol ENB on
the Toronto (TSX) and New York (NYSE) stock
exchanges. To learn more, visit us
at enbridge.com.
Forward-Looking
Information
Forward-looking information, or forward-looking statements,
have been included in this news release to provide information
about Enbridge and its subsidiaries and affiliates, including
management's assessment of Enbridge and its subsidiaries' future
plans and operations. This information may not be appropriate for
other purposes. Forward-looking statements are typically identified
by words such as ''anticipate'', ''expect'', ''project'',
''estimate'', ''forecast'', ''plan'', ''intend'', ''target'',
''believe'', "likely" and similar words suggesting future outcomes
or statements regarding an outlook. Forward-looking information or
statements included or incorporated by reference in this document
include, but are not limited to, statements with respect to the
following: Enbridge's strategic plan, priorities and
outlook; medium term outlooks, including projected EPS and DCF per
share and adjusted EBITDA, and expected growth thereof; expected
dividends, dividend growth and dividend payout policy; expected
supply of, demand for, exports of and prices of crude oil, natural
gas, natural gas liquids (NGL) , liquified natural gas (LNG) and
renewable energy; energy transition and our approach thereto;
environmental, social and governance (ESG) priorities, practices
and performance, including greenhouse gas (GHG) emission reduction
goals and approach and diversity and inclusion goals; expected
adjusted EBITDA; expected adjusted earnings and EPS; expected DCF
and DCF per share; expected future cash flows; expected shareholder
returns; expected performance of the Company's businesses;
financial strength, capacity and flexibility; financial priorities
and outlook; capital allocation priorities; investment capacity;
expected future growth, including secured growth program,
development opportunities and low carbon and new energies
opportunities and strategy, including the planned Flanagan South
Pipeline expansion, Enbridge Houston Oil Terminal, Hamilton
Reinforcement Project and modernization and utility capital
projects; expected costs, in-service dates, characteristics and
benefits of announced projects and system expansion, optimization
and modernization; expected closing of announced transactions
and the timing thereof; and expected future open season on Flanagan
South Pipeline system.
Although Enbridge believes these forward-looking statements
are reasonable based on the information available on the date such
statements are made and processes used to prepare the information,
such statements are not guarantees of future performance and
readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties and other factors, which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Material assumptions
include assumptions about the following: the expected supply of,
demand for and prices of crude oil, natural gas, NGL, LNG and
renewable energy; energy transition, including the drivers and pace
thereof; global economic growth and trade; anticipated utilization
of our assets; anticipated cost savings; exchange rates; inflation;
interest rates; the COVID-19 pandemic and the duration and impact
thereof; availability and price of labour and construction
materials; the stability of our supply chain; operational
reliability and performance; customer, regulatory and stakeholder
support and approvals; anticipated construction and
in-service dates; weather; announced and potential acquisition,
disposition and other corporate transactions and projects and the
timing and impact thereof; approval of the Company's board
of directors of announced transactions and
projects; governmental legislation; litigation; impact
of the Company's dividend policy on its future cash flows; credit
ratings; capital project funding; hedging program; expected EBITDA
and expected adjusted EBITDA; expected earnings/(loss), adjusted
earnings/(loss) and EPS; expected future cash flows and expected
future DCF and DCF per share; estimated future dividends; financial
strength and flexibility; debt and equity market conditions;
estimated cash taxes; and general economic and competitive
conditions. Assumptions regarding the expected supply of and demand
for crude oil, natural gas, NGL, LNG and renewable energy, and the
prices of these commodities, are material to and underlie all
forward-looking statements, as they may impact current and future
levels of demand for the Company's services. Similarly, exchange
rates, inflation, interest rates and the COVID-19 pandemic impact
the economies and business environments in which the Company
operates and may impact levels of demand for the Company's services
and cost of inputs and are, therefore, inherent in all
forward-looking statements. Due to the interdependencies and
correlation of these macroeconomic factors, the impact of any one
assumption on a forward-looking statement cannot be determined with
certainty, particularly with respect to expected EBITDA, expected
adjusted EBITDA, expected earnings/(loss), expected adjusted
earnings/(loss), expected DCF and associated per share amounts, and
estimated future dividends. The most relevant assumptions
associated with forward-looking statements regarding announced
projects and projects under construction, including estimated
completion dates and expected capital expenditures, include the
following: the availability and price of labour and construction
materials; the effects of inflation and foreign exchange rates on
labour and material costs; the effects of interest rates on
borrowing costs; the impact of weather; customer, government and
regulatory approvals on construction and in-service schedules and
cost recovery regimes; and the COVID-19 pandemic and the duration
and impact thereof.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of projects and transactions, successful
execution of our strategic priorities, operating performance, the
Company's dividend policy, regulatory parameters, changes in
regulations applicable to the Company's business, litigation,
acquisitions and dispositions and other transactions, project
approval and support, renewals of rights-of-way, weather, economic
and competitive conditions, public opinion, changes in tax laws and
tax rates, changes in trade agreements, political decisions,
exchange rates, interest rates, commodity prices, supply of and
demand for commodities, and the COVID-19 pandemic, including but
not limited to those risks and uncertainties discussed in this and
in the Company's other filings with Canadian and U.S. securities
regulators. The impact of any one risk, uncertainty or factor on a
particular forward-looking statement is not determinable with
certainty as these are interdependent and Enbridge's future course
of action depends on management's assessment of all information
available at the relevant time. Except to the extent required by
applicable law, Enbridge assumes no obligation to publicly update
or revise any forward-looking statements made in this news release
or otherwise, whether as a result of new information, future events
or otherwise. All forward-looking statements, whether written or
oral, attributable to Enbridge or persons acting on the Company's
behalf, are expressly qualified in their entirety by these
cautionary statements.
Non-GAAP and other Financial Measures
This news release makes reference to non-GAAP and other
financial measures, including earnings before interest, income
taxes, depreciation and amortization (EBITDA), adjusted EBITDA,
adjusted earnings, and adjusted earnings per share (EPS),
distributable cash flow (DCF) and DCF per share and debt to EBITDA.
Management believes the presentation of these metrics gives useful
information to investors and shareholders as they provide increased
transparency and insight into the performance of the Company.
Adjusted EBITDA represents EBITDA adjusted for unusual, infrequent
or other non-operating factors on both a consolidated and segmented
basis. Management uses EBITDA and adjusted EBITDA to set targets
and to assess the performance of the Company and its business
units. Adjusted earnings represent earnings attributable to common
shareholders adjusted for unusual, infrequent or other
non-operating factors included in adjusted EBITDA, as well as
adjustments for unusual, infrequent or other non-operating factors
in respect of depreciation and amortization expense, interest
expense, income taxes and non-controlling interests on a
consolidated basis. Management uses adjusted earnings as another
measure of the Company's ability to generate earnings and uses EPS
to assess the performance of the Company. DCF is defined as cash
flow provided by operating activities before the impact of changes
in operating assets and liabilities (including changes in
environmental liabilities) less distributions to non-controlling
interests, preference share dividends and maintenance capital
expenditures, and further adjusted for unusual, infrequent or other
non-operating factors. Management also uses DCF to assess the
performance of the Company and to set its dividend payout
target. Debt to EBITDA is used as a liquidity measure to
indicate the amount of adjusted earnings available to pay debt (as
calculated on a GAAP basis) before covering interest, tax,
depreciation and amortization.
Reconciliations of forward-looking non-GAAP and other
financial measures to comparable GAAP measures are not available
due to the challenges and impracticability of estimating certain
items, particularly certain contingent liabilities and non-cash
unrealized derivative fair value losses and gains which are subject
to market variability. Because of those challenges, reconciliations
of forward-looking non-GAAP and other financial measures are not
available without unreasonable effort.
The non-GAAP measures described above are not measures that
have standardized meaning prescribed by generally accepted
accounting principles in the United
States of America (U.S. GAAP) and are not U.S. GAAP
measures. Therefore, these measures may not be comparable with
similar measures presented by other issuers. A reconciliation of
historical non-GAAP and other financial measures to the most
directly comparable GAAP measures is available on the Company's
website. Additional information on non-GAAP and other financial
measures may be found in the Company's earnings news releases or in
additional information on the Company's website, www.sedar.com or
www.sec.gov.
Unless otherwise specified, all dollar amounts in this
presentation are expressed in Canadian dollars, all references to
"dollars" or "$" are to Canadian dollars and all references to
"US$" are to US dollars.
FOR FURTHER INFORMATION PLEASE CONTACT:
Media
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Investment
Community
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Jesse Semko
|
Rebecca
Morley
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Toll Free: (888)
992-0997
|
Toll Free: (800)
481-2804
|
Email:
media@enbridge.com
|
Email: investor.relations@enbridge.com
|
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SOURCE Enbridge Inc.