© Reuters. FILE PHOTO: Enbridge Inc logo is seen displayed in this illustration taken April 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
2 minutes read

Enbridge to spend $500 million on pipeline network, raises profit targets

North American pipeline operator Enbridge raised its short-term profit growth forecast on Wednesday and said it will spend $500 million expanding pipeline and storage assets to improve its U.S. Gulf Coast presence.

The Calgary, Alberta-based firm raised its core profit growth forecast to between 7% and 9% through 2026 – from 4%-6% through 2025 – saying the increase is primarily driven by its $14 billion acquisition of three U.S. gas utility companies from Dominion Energy.

Enbridge, which operates North America’s biggest oil pipeline network, the Mainline, said it expects Western Canadian oil production to grow by 500,000 barrels per day (bpd), or 10%, through 2025. That growth will fill pipeline capacity to 99% by 2026, executive vice president of liquids Colin Gruending said at a New York investor meeting.

A near tripling of capacity on the rival Trans Mountain oil pipeline, scheduled for the second quarter, will not take a large volume from the Mainline, Gruending said.

Enbridge can add 200,000 bpd capacity, or 7%, to the Mainline to meet growing U.S. Gulf of Mexico demand without spending much capital, CEO Greg Ebel said.

“We can continue to be optimistic about the pipeline capabilities beyond a big build-out, to actually add those volumes,” Ebel told reporters on a phone call.

The company said it will acquire two marine docks and land from U.S. oil refiner Flint Hills Resources for about $200 million.

The assets are next to the Enbridge Ingleside Energy Center, the largest crude oil storage and export terminal by volume in the United States.

The company will spend $100 million expanding its Gray Oak oil pipeline in Texas.

Enbridge also sanctioned $200 million of offshore pipelines to service Shell and Equinor’s planned Sparta offshore oil and gas project in the Gulf.

The plans come over a month after Enbridge said it will reduce its workforce to cut costs.

Enbridge shares rose 0.9% in New York.

(Reporting by Tanay Dhumal in Bengaluru and Rod Nickel in Winnipeg; Editing by Shinjini Ganguli and Nia Williams)

Legal Disclaimer:
Finance Yahoo
GLOBAL FLOW CONTROL provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above. "

Latest News

  • Pulp and Paper
    1 minute read

    J&F announces R$25 billion for new…

    24 Apr. 2024 | Global Flow Control
  • LNG and Industrial Gases
    2 minutes read

    Shell, TotalEnergies in Talks for Stakes…

    24 Apr. 2024 | Global Flow Control
  • Renewables
    1 minute read

    ONGC plans drilling for first geothermal…

    24 Apr. 2024 | Global Flow Control
  • Power Generation
    3 minutes read

    SaskPower Names Burns & McDonnell as…

    23 Apr. 2024 | Global Flow Control