Enbridge ENB-T on Wednesday raised its 2024 dividend, forecasting higher core profits as the Canadian pipeline operator bets on rising demand to increase capacity across its network.
Canadian oil and gas transportation companies’ profits have been supported by low U.S. inventory levels and increased exports as buyers look for alternatives to Russian oil since Moscow’s invasion of Ukraine last year. .
Meanwhile, industry experts predict that Canadian oil and gas producers will drill 8% more wells in 2024 to take advantage of expanded access to pipelines.
Enbridge said it expects core earnings of C$9.3 billion due to strong system usage from its flagship liquid pipeline business.
The positive outlook for Enbridge, which operates the mainline oil pipeline system that transports the majority of Canada’s crude oil exports to the United States, comes as peer TC Energy on Tuesday forecast an increase in adjusted core profit in 2024. This is what follows.
Calgary-based Enbridge plans to inject about $6 billion in capital in 2024, including maintenance.
The company expects adjusted core earnings to be $16.6 billion to $17.2 billion next year, higher than its 2023 forecast of $15.9 billion to $16.5 billion.
The company has raised its dividend for 2024 by 3.1%.
Enbridge announced in September that it had secured financing for more than 75% of its $14 billion bid to acquire three power companies from Dominion Energy. The transaction, expected to close in 2024, will double the company’s gas distribution business and create North America’s largest natural gas distribution company.