Enbridge continued its foray into the liquefied natural gas sector amid soaring global demand by taking a stake in a proposed West Coast project — even as the expected cost of that project more than tripled.
Posted at 1:47 p.m.
Updated at 5:03 p.m.
The Calgary energy company announced on Friday that it is buying a 30% stake in the construction and operation of the Woodfibre liquefied natural gas (LNG) processing and export facility near Squamish, Colombia. -British.
Pacific Energy retains a 70% stake in the $5.1 billion project as part of the partnership agreement with Enbridge.
Previous stakeholder estimates put the cost of the project at $1.6 billion. The higher price stems in part from financing FortisBC Energy’s Eagle Mountain pipeline expansion, which will connect the plant project to the Enbridge system.
“This facility will provide global LNG markets with a safe, secure and sustainable source of natural gas from British Columbia through a long-term transportation agreement on our T-South pipeline system” — a section that connects the Lower Mainland from British Columbia to northeast British Columbia, where production is significant — Enbridge CEO Al Monaco said in a statement.
Expanding global access to natural gas through liquefied natural gas will play a critical role in North America’s energy future and help reduce global greenhouse gas emissions through generation substitution. coal-fired electricity.
Al Monaco, CEO of Enbridge
The announcement comes as benchmark U.S. natural gas prices approached the US$9 per million BTU mark this week, amid concerns surrounding global energy security and the invasion of the Ukraine by Russia.
Mr. Monaco has in recent months expressed his belief that natural gas exports represent a major business opportunity for North America today, and noted that Enbridge is seeing a strong upturn in commercial interest from Asia and Europe to ensure export capacity.
Commissioning of the Woodfibre facility is scheduled for 2027.
The project holds a 40-year export license and has received all major environmental permits, including the Squamish Nation Environmental Agreement, Enbridge assured. An agreement has also been reached with the Squamish Nation regarding the benefits.
Profits down, despite rising revenue
Enbridge saw its net income attributable to common shareholders decline in the most recent quarter, despite an increase in revenue.
It raked in a profit of $450 million, or 22 cents a share, in its second quarter, down from $1.39 billion, or 69 cents a share, in the same period a year earlier.
Adjusted earnings were $1.35 billion, or 67 cents per share, compared to $1.36 billion, or 67 cents per share, in the same quarter in 2021.
Revenue for the quarter ended June 30 reached $13.22 billion, down from $10.95 billion in the previous second quarter.
The company reaffirmed its fiscal 2022 financial guidance, which still targets earnings before interest, taxes, depreciation and amortization of between $15 billion and $15.6 billion and distributable cash flow of $5.20 to $5. $50 per share.
Enbridge expects its strong operational performance to be offset by difficult market conditions affecting energy services and higher financing costs due to rising interest rates.
Enbridge President and CEO Al Monaco said Friday that the company continued to make progress on its top priorities during the quarter.
“Operating performance remained strong, leading to satisfactory financial results in the second quarter,” he said in a statement.