Enbridge sees profit rising, joins Occidental on project

Canada’s biggest pipeline operator Enbridge Inc on Wednesday forecast higher 2023 core earnings, banking on sustained high demand for oil and gas amid tight supplies, and announced plans to develop a carbon capture hub with a unit of Occidental Petroleum Corp in Texas.

The Calgary-based company expects 2023 core earnings between $15.9 billion and $16.5 billion, higher than its 2022 expectation of $15 billion to $15.6 billion.

Enbridge also raised its quarterly dividend by 3.2 per cent to 88.75 cents per share, and said it plans to renew its share repurchase program for 2023, allowing it to buy back up to $1.5 billion worth of shares. The company expects to spend around $6 billion of capital in 2023.

Demand for oil and gas has surged following Russia’s invasion of Ukraine as sanctions against Moscow left Europe scrambling to find alternate gas supplies and improve long-term energy security.

Enbridge’s Mainline network exports the bulk of Canadian crude to the United States, but the company is expanding its gas pipelines business to supply LNG export terminals in North America, and has also invested in renewables including France’s first offshore wind farm.

The global energy crisis “reaffirms the critical role that Enbridge plays in delivering safe, reliable and affordable energy each and every day, and our priority to expand North American energy export infrastructure,” Enbridge CEO Al Monaco said in a statement.

BMO Capital Markets analyst Ben Pham described Enbridge’s guidance as “broadly positive”, but said the share reaction would likely be neutral.

Enbridge and U.S. shale producer Occidental’s unit, Oxy Low Carbon Ventures, plan to develop and market carbon transportation and sequestration services to other third-party emitters in Texas.

Enbridge shares were down 0.5 per cent on Wednesday afternoon on the TSE at $55.24.