Enbridge signals it’s willing to grow via acquisitions
Enbridge Inc. has indicated a new willingness to grow by buying up firms with depressed share prices Thursday.
“We’re going to look at all of the aspects of potential merger and acquisition opportunities. Typically, we’ve been focused on organic growth,” Enbridge president and CEO Al Monaco said on a conference call Thursday to discuss the company’s financial targets for 2016.
Growth at Enbridge, Canada’s largest pipeline company, has historically come from building its own pipelines, but Monaco said the company is open to external opportunities. “For example, we’ve talked about increasing our natural gas footprint. That would be one element in the long term we’d look at,” he said.
Share prices at pipeline companies in Canada and the U.S. have tumbled this year as the oil rout has persisted, which has led to analyst speculation that large midstream companies could buy up their smaller competitors.
At the company’s investor day in October, Enbridge indicated it wanted to grow its gas pipelines and processing business in places such as Pennsylvania and the U.S. northeast, where gas supply from the Marcellus formation continues to grow.
The Calgary-based company, which recently announced a $38-billion, five-year growth plan, said it plans to spend $9 billion next year. It also hiked its quarterly dividend 14 per cent to 53 cents per share and provided updates on two of its oil pipelines.
Meanwhile, company spokesperson Graham White confirmed the company had begun delivering oil to refineries in Quebec through its Line 9B, which had twice been delayed by the National Energy Board.
Executives from Suncor Energy
Inc. and Valero Energy Corp. wrote letters to the NEB expressing their frustration with the continued delays to the line, which has been reversed to carry 300,000 barrels of oil per day from southern Ontario into Quebec.
The reversal of Line 9B now allows Suncor to directly connect its oilsands operations with its refinery in Quebec and allows Suncor and Valero to use domestic oil as feedstock.
Monaco also indicated that the company is still working to gain First Nations support for its controversial Northern Gateway pipeline despite a federal government directive to ban crude tanker traffic in northern B.C.’s coastal waters.