Enbridge Inc. has set a 2022 budget of C$1.1 billion ($880 million) to expand “newly sanctioned growth projects” for natural gas, oil and power generation operations in Canada, the United States and in Europe, President Al Monaco said Tuesday.

During the annual investor day, Monaco and the management team detailed initiatives through 2024 to expand infrastructure and fund the emerging low-carbon business. 

“We’re confident that our assets will be an integral source of energy supply for decades to come and are excited by the future low-carbon investment opportunities that we see,” Monaco said. Overall corporate growth in the near term is “focused on enhancing existing asset returns, modernizing our assets, and low capital intensity opportunities within our conventional businesses.”

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Enbridge’s “strong execution” for this year’s strategic priorities “provides a solid foundation for next year and our three-year outlook,” Monaco said. “Our assets have been highly utilized, reflecting strong end-user demand and the critical role they play in delivering reliable and affordable energy. 

“Recent global energy shortages have confirmed again that our assets will remain essential, while our early low-carbon energy investments illustrate how our assets will be a bridge to a cleaner energy future.”

Valley Crossing Commitment

A C$500 million ($400 million) commitment to expand capacity on the Valley Crossing Pipeline  LLC in South Texas topped the growth agenda outlined during the annual investor day presentation in Toronto.

The 2.6 Bcf/d Valley Crossing system expansion would depend on whether a liquefied natural gas (LNG) export project in deep South Texas is sanctioned. Valley Crossing began operations in late 2018, with a cross-border connection in the Gulf of Mexico to Mexico’s Sur de Texas-Tuxpan. 

As proposed, Enbridge’s expansion would enable up to 0.72 Bcf/d to be transported to Texas LNG Brownsville LLC, a terminal that would be sited near the border in South Texas. 

The Valley Crossing expansion would be announced once construction for Texas LNG is launched, an Enbridge spokesperson confirmed to NGI. 

Texas LNG, owned by Glenfarne Group LLC, has approval to transport up to 4 million metric tons/year. The project, like other U.S export projects not yet sanctioned, is facing further scrutiny by the Federal Energy Regulatory Commission, which may reconsider climate and environmental justice impacts.

Meanwhile, Enbridge also is seeing potential gas demand growth on the Pacific coast of Canada. Export projects including Woodfibre LNG, plus growing Canadian gas demand, create the potential for a C$2.5 billion ($2 billion) expansion of the Westcoast pipeline in British Columbia, according to the company.

‘Enterprise-Wide’ ESG Initiatives

Last year, Enbridge set environmental, social and governance, or ESG, goals to “reduce emissions to net zero and improve diversity,” Monaco said. “This year, we’ve lowered emissions, increased workforce and board diversity, and integrated our ESG goals into enterprise-wide business plans and compensation to drive future performance.”

To date in 2021, Enbridge has placed C$10 billion ($7.9 billion) of growth capital into service. One of the “mantras at Enbridge is the disciplined deployment and allocation of capital,” Monaco said. In the “three-year planning horizon,” the company expects to have C$5-6 billion ($4-4.7 billion) of annual investment capacity, with C$3-4 billion ($2.3-3 billion) “prioritized to core low capital intensity and utility-like investments.” Another C$2 billion ($1.6 billion) would be “deployed to the next best alternatives and benchmarked against share repurchases.”

Enbridge also plans “to continue to invest in low-carbon opportunities that leverage our existing assets and provide a platform for future growth,” Monaco said.

Commitments for 2021 also include C$300 million ($240 million) for pipeline service for the Dawn gas hub in southwestern Ontario; C$200 million ($160 million) for six solar power installations along gas and oil pipelines; and a C$100 million ($80 million) partnership share in a floating wind power project offshore France.

Stockholder returns also figure in the Calgary pipeline and utility conglomerate’s agenda. Enbridge announced a 3% quarterly dividend increase to C86 cents/share (69 cents), and plans for a stock buyback program worth up to C$1.5 billion ($1.2 billion).

Carolyn Davis contributed to this story.