Canada’s premier energy infrastructure company, Enbridge, has unveiled a monumental expansion project worth $700 million, set to propel its long-term growth trajectory forward. This development will see the construction of two new pipeline systems, designed to support BP’s recently approved Kaskida project in the Gulf of Mexico. With an expected completion date of 2029, this project will further cement Enbridge’s position as a leading player in the energy sector.
The Canyon Oil Pipeline System, boasting a capacity of 200,000 barrels per day, will originate from the Keathley Canyon area and terminate at the Green Canyon 19 platform, operated by Shell Pipeline Company. Meanwhile, the Canyon Gathering system will have the capacity to transport 125 million cubic feet of gas per day, feeding into Enbridge’s existing Magnolia Gas Gathering Pipeline.
BP has secured long-term contracts for these pipelines, providing Enbridge with a steady stream of low-risk revenue. Moreover, the design of these pipelines allows for future expansion, accommodating potential discoveries from BP’s emerging Paleogene portfolio.
This project adds to Enbridge’s already impressive secured capital program of $17.7 billion, spanning its four core franchises. With a growth visibility now extended through 2029, the company is poised to continue its dividend growth streak, which has seen payouts increase for an impressive 29 consecutive years.
Enbridge’s robust financial profile, bolstered by recent acquisitions and strategic partnerships, supports its ambition to grow earnings by around 5% annually over the medium term. This, in turn, should fuel continued dividend increases of up to 5% per year. With a high dividend yield and a low-risk profile, Enbridge is an attractive option for investors seeking a reliable income stream.
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