March 6, 2023 [Yahoo!] – Pipeline giant Enbridge Inc. announced $3.3 billion in new spending on a trove of projects, including an oil terminal in Texas that could become an outlet for increased Canadian crude exports via the United States.
In an update to investors on March 1, Calgary-based Enbridge announced it will spend US$240 million to construct a new heavy-oil terminal in Houston, at the terminus of its Seaway Pipeline system, which carries Canadian crude and other U.S. crude types to the Gulf Coast.
“We plan to move forward with our Houston oil terminal for an initial capacity of 2.5 million barrels,” Enbridge chief executive Greg Ebel said at his first investor day conference since taking over from former CEO Al Monaco last month.
“This will provide even more U.S. Gulf Coast optionality for our customers.”
The new terminal will have access to Houston-area refineries and export access through the Seaway docks at Freeport and Texas City — as well as potential future export access through Enbridge’s partnership in Enterprise Products Partner L.P.’s proposed Sea Port Oil Terminal (SPOT) project offshore of Freeport.
Even though the shift to greener energy is based on an assumption that the production of fossil fuels will diminish over the decades ahead, Ebel said he expects oil and gas exports from North America will continue to grow in response to global demand.
“When I think about 2022, I think it’s fair to say that it was really an inflection point for the sector,” Ebel said. “Energy markets were extremely volatile and exposed critical vulnerabilities in the global integrated energy system, years of chronic underinvestment in the upstream and the downstream were compounded by Russia’s invasion of the Ukraine, which led to unprecedented pipe price spikes.”
And while prices have moderated since last year, preventing these crises from occurring again will require governments and markets to take a balanced approach to energy reliability, sustainability and affordability, Ebel said. “The end goal is to ensure that we’ve got sufficient energy supply to meet global demand while minimizing environmental impact,” he said. “And perhaps most importantly, making sure that energy is affordable to all.”
Enbridge also announced a number of gas projects, including an agreement to acquire 35 billion cubic feet of gas storage in the Gulf Coast for US$335 million, as well as an US$80-million investment in U.S. biogas company Divert Inc.
The company also said it has begun environmental assessments on a key decarbonization project in Ontario. The company said it will build a pipeline to deliver natural gas to Hamilton steelmaker ArcelorMittal Dofasco in order to replace the company’s use of coking coal. Once complete, Enbridge said the project could lower the facility’s emissions by an estimated 60 per cent.
The company said it will spend $2.4 billion on gas transmission modernization and utilities as part of its secured capital program. The pipeline giant also said it expects its earnings per share to grow at a compounded annual rate of four to six per cent through 2025.
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