CALGARY, AB, Nov. 4, 2022 /PRNewswire/ – Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported third quarter 2022 financial results, announced $3.8 billion of newly secured growth projects, including an expansion of the T-South segment of the B.C. Pipeline, and reaffirmed its 2022 financial outlook.
(All financial figures are unaudited and in Canadian dollars unless otherwise noted. * identifies non-GAAP financial measures. Please refer to Non-GAAP Reconciliations Appendices.)
- Third quarter GAAP earnings of $1.3 billion or $0.63 per common share, compared with GAAP earnings of $0.7 billion or $0.34 per common share in 2021
- Adjusted earnings* of $1.4 billion or $0.67 per common share*, compared with $1.2 billion or $0.59 per common share in 2021
- Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA)* of $3.8 billion, compared with $3.3 billion in 2021
- Cash provided by operating activities of $2.1 billion, compared with $2.3 billion in 2021
- Distributable cash flow (DCF)* of $2.5 billion or $1.24 per common share*, compared with $2.3 billion or $1.13 per common share in 2021
- Reaffirmed 2022 full year guidance range for EBITDA of $15.0 billion to $15.6 billion and DCF per share of $5.20 to $5.50
- Secured an expansion of B.C. Pipeline’s T-South section adding 300 million cubic feet per day (MMcf/d) of capacity with an estimated capital cost of up to $3.6 billion
- Launched a binding open season for a second expansion of B.C. Pipeline’s T-North section adding approximately 500MMcf/d of capacity
- Formed strategic partnership with 23 First Nation and Métis communities selling a 11.57% non-operating interest in seven Regional Oil Sands pipelines for $1.12 billion
- Advanced U.S. Gulf Coast oil strategy through increased interest in Gray Oak Pipeline while lowering commodity exposure with reduced interest in DCP Midstream LP; received US$400 million cash
- Enhanced North American renewable development portfolio with US$270 million acquisition of Tri Global Energy (TGE)
- Acquired additional 10% ownership interest in Cactus II Pipeline in the Permian bringing Enbridge’s ownership to 30%
- Sanctioned investment for four additional oil storage tanks at the Enbridge Ingleside Energy Center (EIEC)
- Secured two new RNG projects in Ontario where Enbridge will invest in gas upgrading and pipeline connections
- Released Enbridge’s Indigenous Reconciliation Action Plan building on the Company’s growing track record of engagement with Indigenous communities and employees
Al Monaco, President and CEO commented on the following:
“While global economies and energy markets are experiencing significant volatility, Enbridge’s premium North America franchises, resilient commercial underpinnings, and our increasing inventory of organic opportunities put us in a great position to continue to grow into the future. The fundamentals of our business continue to be positive; it’s clear that the world needs all forms of energy to meet future demand, especially in the context of the energy security, reliability, and affordability challenges that everyone is faced with in today’s environment.
“We are pleased with our strong third quarter results and year-to-date performance, a testament to the Enbridge team across our four core businesses. We’re tracking to plan and expect to achieve our 2022 EBITDA and DCF per share guidance. Looking forward, our low-risk business model provides us with excellent visibility to growing cash flows and our assets are underpinned by long-term contracts or cost-of-service frameworks that provide built-in inflation protections.
“The current environment and strong global energy fundamentals validate our dual-pronged strategy of expanding and modernizing our conventional business and increasing investment in low-carbon growth. We’ve made excellent progress on the priorities that we laid out at Enbridge Day last December, particularly related to our natural gas strategy on both sides of the border.
“On the conventional infrastructure side, last quarter we sanctioned a major expansion of our T-North gas transmission system in British Columbia and agreed to acquire a 30% interest in Woodfibre LNG near Squamish. The 535 MMcf/d T-North expansion is progressing and we expect to close the Woodfibre transaction shortly.
“Today we’re announcing an expansion of our T-South system that will provide much needed capacity for customers, supported by binding long-term take-or-pay commitments. The expansion is critical to meet natural gas demand and ensuring energy reliability in the region. The project illustrates well the criticality of existing pipe in the ground in minimizing the environmental footprint of much needed energy infrastructure. The project will be developed in consultation and close collaboration with communities.
“We also announced today an open season for a further expansion of our T-North system of approximately 500 MMcf/d. This expansion is needed to support regional production growth, LNG exports, and increased demand.
“South of the border, we’re also excited about our growing opportunity set in the U.S. Gulf Coast where we already feed five LNG export facilities and we have line of sight to additional LNG related and regional gas pipeline expansion projects.
“Continuing with natural gas, we’re executing our $3.5 billion secured growth program at our Ontario gas distribution utility with $1.1 billion of projects on track to enter service this year. Last week, we filed a regulatory application that will establish the next incentive framework, through 2028. This rate-making model has worked well for customers and Enbridge, and we expect continued rate base and earnings growth from this franchise.
“In our Liquids business, we’ve seen strong recovery of Western Canadian supply and throughput across our systems, including the Mainline. We’ve sanctioned construction of four new oil storage tanks at our Ingleside export facility and acquired an additional 10% interest in the Cactus II Pipeline, both of which bolster our U.S. Gulf Coast oil export strategies.
“We announced a landmark partnership with Athabasca Indigenous Investments on seven pipelines in the Athabasca region. We’re excited to work together with our Indigenous partners on operating these assets, as well as stewarding the surrounding environment. This transaction demonstrates our commitment to recycling capital at attractive valuations and provides a framework for potential future Indigenous partnerships which we believe will be a critical component of future energy infrastructure development and ownership.
“Discussions with shippers on a new Mainline commercial agreement continue. We are pursuing two commercial paths – the potential for another incentive-type tolling arrangement, or a cost-of-service model. While we anticipated a decision to determine the optimal path for Enbridge and our customers in the third quarter, discussions are ongoing, and we expect to continue negotiations through the end of the year.
“This quarter, we made great progress on our low-carbon priorities. In renewables, our acquisition of Tri Global Energy meaningfully accelerates our North American strategy and opportunity set. The Tri Global team strongly complements our existing capabilities and the deal immediately adds an attractive backlog of 3 GW of development projects that could be in service between 2024 and 2028, with more opportunities in the works. In Europe, execution of our four offshore wind projects off the coast of France is progressing, with Saint Nazaire wrapping up and expected to generate first power later this month.
“We’ve also made good strides in our RNG business with two newly secured projects in Ontario totaling approximately $100 million, which will supply zero emissions natural gas, delivered under long term take-or-pay contracts.
“With today’s announcements, we’ve secured $8 billion of new capital projects this year and our secured capital backlog is now $17 billion, which will be fully funded within our equity self-funding model. Our secured program is diversified and underpinned by commercial models that align with our low-risk value proposition. We will continue to be disciplined allocators of capital by focusing on a strong balance sheet, investing wisely in the business, and returning capital to shareholders.
“Finally, as I reflect on my 27 years at Enbridge, the last 11 as CEO, I’m proud of what the Enbridge team has accomplished. We’ve consistently grown cash flows and the dividend, delivered on our strategic priorities, and materially enhanced and diversified our asset mix by substantially increasing our natural gas footprint and low-carbon platform and capabilities. I’m particularly pleased with how we have positioned our business and implemented strategies to lead the energy transition. Looking forward, we’ll continue to deliver on our purpose to fuel people’s quality of life, safely, reliably, and sustainably.
“I’ve been honored to lead Enbridge and I’m confident that under Greg Ebel’s leadership, the management team will continue to grow Enbridge – North America’s leading energy infrastructure company. I wish to sincerely thank our immensely skilled and dedicated staff, shareholders and other stakeholders, and our Board of Directors for their support of Enbridge. Since the announcement, Greg and I have implemented a transition plan to ensure a smooth changeover and maintain momentum and consistency – and that’s well underway.”