Enbridge Inc. ENB-T on Wednesday forecast higher core earnings and raised its dividend for 2024 as the Canadian pipeline operator bets on higher demand to lift volumes transported across its network.
Profits at Canadian oil and gas transportation have been buoyed by low U.S. inventory levels and increased exports as buyers sought alternatives to Russian oil since Moscow’s invasion of Ukraine last year.
Meanwhile, industry experts have forecast that Canadian oil and gas producers will drill 8 per cent more wells in 2024 to take advantage of greater access to pipelines.
Enbridge said it expects $9.3-billion in core profit from its liquids pipelines business, the company’s main unit, helped by strong system utilization.
The upbeat forecast from Enbridge, which operates the Mainline oil pipeline system that ships the bulk of Canada’s crude exports to the U.S., follows peer TC Energy Corp. estimating higher adjusted core earnings for 2024 on Tuesday.
Calgary-based Enbridge expects to deploy about $6-billion of capital in 2024, including maintenance.
The company forecast adjusted core earnings to be between $16.6-billion and $17.2-billion next year, higher than its 2023 expectations of $15.9-billion to $16.5-billion.
The company raised its 2024 dividend by 3.1 per cent.
Enbridge, which made a $14-billion bid to buy three utilities from Dominion Energy Inc. in September, said it had secured funding for more than 75 per cent of the total purchase price. The deal, expected to close in 2024, would double the company’s gas distribution business and also create North America’s largest natural gas provider.