Enbridge (TSX: ENB) said it will accelerate an upsized expansion of its Mainline system, adding 150,000 barrels a day by 2027 and 250,000 barrels a day by 2028 after the network ran full in the third quarter.
The company had previously guided to a two-step plan of 150,000 barrels a day in 2027 and 150,000 barrels a day in 2028. On the latest earnings call, executive vice president Colin Gruending confirmed the larger second tranche, saying “[phase one] is at the plate now… [phase two] is in the batter’s box and it’s got a bigger bat than we thought we had before.”
Enbridge reported adjusted EBITDA of $4.3 billion in the third quarter, up from $4.2 billion a year earlier, supported by high pipeline utilization as Mainline operated at full capacity.
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The midstream operator also sanctioned $3 billion in new projects in the quarter. That total includes $500 million for the Southern Illinois Connector, a crude tie-in expected to add 100,000 barrels a day of additional export capacity for Canadian barrels to the US Gulf Coast.
CEO Greg Ebel said demand and supply dynamics are underpinning the move. “Strong demand for Canadian oil in the United States and the relative strength of Canadian producers — particularly those in the oilsands — who face far less production decline than their US shale rivals, is driving demand for increased export capacity out of Western Canada,” Ebel said.
Questions persist about whether Enbridge will pursue a brand-new long-haul pipeline as Prime Minister Mark Carney advances a push to fast-track nationally significant infrastructure.
Both Ebel and Gruending downplayed that path on the call, emphasizing a focus on brownfield opportunities and de-bottlenecking existing systems.
Gruending also indicated the company is studying additional phases on Mainline if conditions warrant. He said engineering work is considering a third or even fourth phase, noting that a larger Canada-US trade framework that includes energy could accelerate the imperative.
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