Pipeline operator Enbridge reported better-than-expected third-quarter profits, thanks to growing demand for oil and gas. Based in Calgary, Alberta, the company transports around 30% of the crude oil produced in North America and almost 20% of the natural gas consumed in the United States. This increased demand was spurred by low inventory levels in the US and rising exports, as buyers sought alternatives to Russian oil since the start of the conflict in Ukraine last year. This has kept pipelines running, boosting profits for oil and gas transport companies.
Enbridge’s third-quarter financial performance
Enbridge CEO Gregory Ebel said in a statement, “In our liquids business, we continue to see record utilization across the system, including the Mainline.” The Mainline system transports light and heavy crude oil, natural gas liquids and refined products from Edmonton, Alberta, to various markets in Canada and the U.S. Midwest. Quarterly core profits from the company’s liquids pipelines rose by 15.5% to C$2.25 billion (US$1.64 billion) year-on-year, driven by a more than 1% increase in Mainline volume to 3 million barrels per day.
Enbridge’s gas expansion strategy
Enbridge shares listed in the United States rose by 1.5% in pre-market trading. Enbridge is also betting big on gas in the United States. In September, the company announced a $14 billion bid for Dominion Energy’s three utility assets, with the aim of creating North America’s largest gas utility platform. The transaction is scheduled to close in 2024. “We are confident that these acquisitions will strengthen our ongoing dividend growth profile and generate solid returns for shareholders,” said CEO Ebel.
The company confirmed its annual financial outlook for adjusted earnings before interest, taxes, depreciation and amortization of C$15.9 billion to C$16.5 billion, and distributable cash flow of $5.25 to $5.65 per share. It reported adjusted earnings of 62 Canadian cents per share for the quarter ended September 30, against an average estimate of 60 Canadian cents per share, according to LSEG data.
Enbridge exceeded expectations in the third quarter thanks to growing demand for oil and gas, posting solid profits. The company remains confident in its outlook for dividend growth and attractive shareholder returns thanks to strategic acquisitions and its leading position in the liquid transport industry.
