Enbridge Eyes Data Center Market, Increases Profit Forecast and Pipeline Capacity
(Reuters) — Pipeline operator Enbridge raised its full-year profit forecast on Friday as it benefits from newly acquired assets and said it was well-positioned to capitalize on growing demand for natural gas to supply U.S. data centers.
Calgary-based Enbridge has closed several deals so far this year, including a $4.3-billion deal to buy U.S. utility Questar Gas Company and its associated company Wexpro from Dominion Energy.
Quester supplies gas in Utah, Southern Wyoming and Southeastern Idaho to about 1.2 million customers and Enbridge said it was excited about opportunities to supply regional data centers, which consume a lot of power.
The company also sanctioned an expansion of its Gray Oak pipeline by 120,000 barrels per day (bpd) in the Permian basin and said the integration of Enbridge Gas Ohio and Enbridge Gas Utah was well underway.
Enbridge raised its expectation for full-year adjusted core profit between C$17.7 billion and C$18.3 billion, from its previous range of C$16.6 billion to C$17.2 billion.
CEO Greg Ebel said the company, which is North America's largest natural gas utility and ships the bulk of Canadian crude exports to the United States, had the infrastructure to benefit from high demand for energy.
"When you look across the entire system, liquids demand is up, natty (natural gas) is up, electrons are up. If you look at the supply side, the same thing," Ebel told an earnings call. "And if you've got linear infrastructure and all those pieces, you win."
The company also said it plans to add 150,000 bpd of oil export capacity to the 3 million bpd Mainline pipeline system.
However, Enbridge reported a lower-than-expected profit in the second quarter ended June 30, partly due to weaker income from its Canadian gas transmission segment and higher interest rates that hiked borrowing costs and hurt demand.
Quarterly adjusted core profit from Enbridge's Canadian Gas Transmission segment was down 30% to C$98 million from a year earlier, while adjusted core profit from its Mainline System fell 9.3% to C$1.32 billion in the quarter.
In contrast, peer TC Energy, which is in the process of spinning off its oil business, reported a profit beat on Thursday, helped by higher volumes of natural gas transported through its system and said it expects the AI boom to further fuel demand.
Enbridge reported an adjusted profit of 58 Canadian cents per share, compared with analysts' average estimate of 64 Canadian cents, according to LSEG data.
The company's shares were last down 0.1% on the Toronto Stock Exchange at C$37.45.
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