Teresa Chen

Teresa Chen asked about Enbridge's strategy for mainline expansion partnerships, specifically if they would consider partnering with other pipelines like Pathline to move incremental WCS barrels to the US Gulf Coast, beyond their current JV system with Energy Transfer. She also inquired about how Enbridge plans to align DCF per share growth with EBITDA growth (5%) over time, given that DCF per share has recently trailed EBITDA growth, and what key drivers will bridge this gap.

Answer

Greg Ebel, President and CEO, affirmed that joint ventures are a significant part of Enbridge's playbook, partnering with 'basically everyone in the industry,' including Enterprise Products on Seaway, and they are open to such collaborations. Pat Murray, EVP and CFO, explained that the recent disconnection between DCF per share and EBITDA growth was primarily due to cash taxes, which are expected to plateau and return to being more in line, causing the two metrics to converge later in the decade.

Teresa Chen asked about Enbridge's willingness to partner with other pipelines, such as Pathline, for moving incremental Western Canadian Sedimentary (WCS) barrels to the U.S. Gulf Coast, beyond its existing joint venture with Energy Transfer. She also inquired how Enbridge plans to align DCF per share growth with EBITDA growth over time, given that DCF per share has recently trailed EBITDA growth.

Answer

Greg Ebel, President and CEO, affirmed that joint ventures are a core part of Enbridge's strategy, highlighting successful partnerships like Enterprise Products on Seaway, and expressed openness to collaborating with other industry players. Pat Murray, EVP and CFO, explained that the recent divergence between DCF per share and EBITDA growth was primarily due to cash taxes, which are now plateauing and expected to return to more normalized levels, allowing the two metrics to converge later in the decade.

Teresa Chen questioned TC Energy's strategic decision to focus on natural gas transmission for data centers rather than competing in power generation, despite its expertise. She also sought an update on the Bruce C project's path to Final Investment Decision (FID), key milestones, and how cost and execution risks would be managed, including lessons from the Major Component Replacement (MCR) program.

Answer

Tina Faraca, Executive Vice President and Chief Operating Officer, Natural Gas Pipelines, stated that focusing on low-risk transmission through utility interconnections for data centers provides compelling returns, and there isn't significant customer demand for behind-the-meter projects in the U.S. Greg Grant, Executive Vice President and President, Power and Energy Solutions, confirmed progress on Bruce C, including receiving a notice of commencement, with the next step involving ISO and funding. He highlighted that MCR program innovations, such as robotics, are yielding successive efficiencies that would be applied to Bruce C, improving execution and reducing timelines.

Teresa Chen asked for details regarding Energy Transfer's consideration of converting an NGL pipeline in the Permian to natural gas service, including which pipeline is being considered, the potential costs, and the related economics. She also questioned the earnings impact of the Enbridge agreements for Canadian crude oil transportation via DAPL and ETCOP, particularly in relation to DAPL's recontracting timeline and whether these projects would backfill volumes or drive earnings growth.

Answer

Mackie McCrea (Co-CEO) explained Energy Transfer's history of converting pipelines to different services for optimal revenue. He noted that competitive NGL rates and upcoming contract cliffs are prompting the review of their three Permian NGL pipelines. He suggested that converting one to natural gas could potentially double revenue compared to NGL service, especially with growing data center demand. Regarding crude, McCrea stated that the Enbridge deals for Canadian crude (Southern Illinois Connector and DAPL capacity) are perfectly timed with Bakken volume leveling off and DAPL contract cliffs, aiming to keep DAPL full for the long term with 15-year agreements, potentially leading to upside beyond backfilling.