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    Canada’s Enbridge gains in Q2

Summary

C$10bn worth of new projects expected to be in-service in 2021

by: Dale Lunan

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Canada’s Enbridge gains in Q2

Canadian midstream infrastructure company Enbridge reported “strong” Q2 results July 29, with adjusted earnings rising to C$1.36bn (US$1.09bn) from C$1.1bn and adjusted Ebitda holding steady at C$3.3bn. Distributable cash flow also rose, to C$2.5bn from C$2.4bn.

“Following a strong start to the year, our four franchises delivered solid financial performance in the second quarter, with good operating performance and high utilisation across our systems,” CEO Al Monaco said. “The global economic recovery is now well underway, and our assets have been essential in assuring access to reliable and affordable conventional and renewable energy throughout this critical period.”

Enbridge expects to bring about C$10bn of projects into service this year, Monaco said, including a pair of gas transmission expansion projects in BC, new natural gas customer connections, expansions and reinforcement projects in Ontario and several other smaller projects within its liquids pipelines and gas transmission and midstream portfolios.

In BC, the C$1bn T-South reliability and expansion programme and the C$500mn Spruce Ridge project will add about 590mn ft3/day of capacity to meet growing regional demand in the province and in the US Pacific Northwest.

On T-South, two of five planned compressor replacements were completed in the second quarter, while the first of two new sections of pipe on the Spruce Ridge project were completed. The remaining components of both projects are expected to be completed and in-service by Q4 2021.

Enbridge is also advancing its US$2.1bn modernisation programme through 2023, with about US$400mn spent so far. The programme is designed primarily to replace aging compressor stations and upgrade other components, with the goal of improving system reliability and reducing greenhouse gas (GHG) emissions associated with the transportation of natural gas.

And it is working on a potential expansion to its East Tennessee Natural Gas system (ETNG), as it awaits a decision from the Tennessee Valley Authority (TVA) on an environmental impact statement covering a variety of options for replacing an existing coal-fired power plant.

“Several options to replace the retiring coal-fired generation would be assessed in TVA’s environmental impact statement,” Enbridge said. “Should the onsite natural gas option of building a combined cycle plant be selected through TVA’s review, Enbridge would deliver on the required expansion of the East Tennessee system.”

The proposed ETNG project would consist of additional pipe, largely within existing rights-of-way, the installation of one electric-drive compressor station, solar facilities behind the meter and other design features to minimise GHG emissions. Pending a decision by the TVA to support the combined cycle option and the receipt of all necessary approvals and permits, construction would begin in 2025 with a target in-service date in the fall of 2026.