Enbridge Inc. · TSX:ENB
Enbridge — Investor Presentation (August 2022)
48 slides from Enbridge's investor presentation, August 2022
Slide 1: Investment Community Update
Modernizing Systems and Sustainable North American Growing Renewables and Other Achieving Net Zero Energy Drives Exports Low-Carbon Platforms Enbridge Inc. (TSX: ENB; NYSE: ENB) Investment Community Update August 2022
Slide 2: Legal Notice
Legal Notice Forward Looking Information This presentation includes certain forward-looking statements and information (FLI) to provide potential investors and shareholders of Enbridge Inc. (Enbridge or the Company) with information about Enbridge and its subsidiaries and affiliates, including manag
Slide 3: Enbridge Footprint
Enbridge Footprint Ireland Gas 170 MM people served; ~10% UK Transmission of LNG exports Germany Gas ~2 Tcf of natural gas delivered France Distribution annually; ~3.9 MM customers 12 MMbpd globally Liquids competitive refineries served Vancouver 2.2 GW1 of renewable energy Boston Power serving ~900
Slide 4: Low-Risk Commercial Profile
Low-Risk Commercial Profile 40+ Diversified Highly Predictable 98% Industry-Leading Sources of Cash Flow Utility-Like Cash Flows Cost-of-service/ Contracted Financial Risk Profile 4% Power (Power Price Agreements) 12% Gas Distribution (Cost-of-service) 4% Canadian Gas Transmission (Cost-of-service/T
Slide 5: Strengthening Our Base Business
Strengthening Our Base Business Regulatory Update Built-in Revenue Cost and Productivity Escalators1 Improvements Texas Eastern • + ~C$125M EBITDA (% of EBITDA) Algonquin • + ~C$25M EBITDA Regulatory recovery • + ~C$10M EBITDA mechanisms BC Pipeline East Tennessee • + ~C$10M EBITDA ~15% Alliance U.S
Slide 6: 2021 ESG Performance
2021 ESG Performance GHG emissions over 29% -20 % $6B 27% Improvement in Methane Invested Intensity TRIF1 rate over emissions in pipeline 2018 35% three-year average 1.65 tCO2e to 1.32 tCO2e integrity in last 3 years Diversity & Inclusion 31% 2022 Catalyst Award $960 spend with M Enbridge Fueling Fu
Slide 7: ENB – A Differentiated Service Provider
ENB – A Differentiated Service Provider Today’s Success Factors… … in Action Line 3 Replacement Ingleside Export Facility ESG Leadership Net-zero emissions & diversity goals Undeveloped Terminal Land World-Class Execution $36B into service since 2017 Low-Carbon Capabilities • >300 route modification
Slide 8: Surfacing Shareholder Value
Surfacing Shareholder Value Revenue & Productivity Asset Sales & Monetization Capital Efficiency Optimization EV/EBITDA Recent Projects Multiple $5.7 ~$9B 400kbpd $6 $5 Asset sales DRA Expansion <3x of zero-capital Mainline since 2018 $4 Gas Pipe optimizations ~6x $3 Compression $2.1 $1.2B $2 $1.2 G
Slide 9: Surfacing Shareholder Value
Surfacing Shareholder Value 7.0x Improving Asset Returns 6.5x Balance Sheet Strength Simplified Structure (ROCE1) (Debt/EBITDA) ~8% 6.0x ~6.5% 5.5x Target Range: 4.5x – 5.0x1 5.0x 4.5x Sponsored Vehicle Buy In 4.0x 3.5x SEP EEP EEQ ENF 3.0x 2018 2019 2020 2021e 2022e 2023e 2024e 2017 2018 2019 2020
Slide 10: A Proven Investment Track Record
A Proven Investment Track Record Significant EBITDA1 Growth Superior Dividend Growth Industry Leading TSR2 (Billion, CAD) (Dividend per Share) (since 2008) $15.0-15.6 $3.44 11.9% 8.9% 9.2% $0.66 $2.5 2008 2022e 2008 2022e Midstream S&P 500 Enbridge Peers Our approach has yielded superior growth and
Slide 11: Our Approach to Energy Transition
Our Approach to Energy Transition Conventional Investment Required Core Business Remain Critical (Cumulative global investment, USD Trillions)1 $10.0 Gas Transmission Liquids Pipelines Gas Distribution & Storage $5.0 170 MM 12 MMBPD 15 MM Gas Oil People served Refining capacity People served $0.0 20
Slide 12: Enbridge’s Two-Pronged Strategy
Enbridge’s Two-Pronged Strategy Global Demand & Supply Outlook1 (IEA Announced Pledges Scenario, Exajoules) STEPS2 Conventional Growth • Optimize existing capacity and throughput Biofuels • Expand and modernize assets NZE2 • Develop export markets Wind & Solar Hydro • Accelerate natural gas investme
Slide 13: Capitalizing on the Energy Transition
Capitalizing on the Energy Transition Conventional Core Growth Low-Carbon Growth Optimize / Exports Modernize Solar/ RNG2 H23 CCS4 Expand Assets Wind Gas 1 Transmission Gas Distribution Liquids 1 Pipelines Renewable Power Embedded conventional and low-carbon growth opportunities across our businesse
Slide 14: Predictable Organic Growth
Predictable Organic Growth Executing on Secured Up to $6B/year of Organic Growth Potential Growth (2021-2024) Supplements 2022-2024, drives post-2024 growth $17B Gas Transmission Gas Distribution up to ~$2.0B/year up to ~$1.5B/year • System modernization • System modernization $6B $13B • Capital eff
Slide 15: Gas Transmission & Midstream
Gas Transmission & Midstream Up to ~$2.0B / year West Coast LNG Export Strategy Meeting Residential & • ~$3B of modernization through Commercial Demand 2025; $0.5B to $1.0B ongoing U.S. Northeast Gas Demand Supporting Electric • $4B+ in development to support Global Natural Gas Demand1 Generation Gr
Slide 16: Gas Distribution & Storage
Gas Distribution & Storage Up to $1.5B / year Growing Regulated • ~$4B of investment planned Assets through 2025; $1B ongoing ONTARIO Thunder Bay Montreal Ottawa Expanding Storage & • ~$1B of Dawn Hub & pipeline Sault Ste. Marie H2 Transportation expansions planned Visible Franchise Customer Growth1
Slide 17: Liquids Pipelines
Liquids Pipelines Existing Operating Up to $1.0B / year Leverage Capitalize on Operating • Execute on continued Capital Efficient Leverage (Zero Capital) productivity improvements Expansion Potential Express Capital Efficient • $2.5B+ of low cost mainline and Expansions market access expansions Grow
Slide 18: Leveraging Existing Assets for Low-Carbon Growth
Leveraging Existing Assets for Low-Carbon Growth Gas Transmission $0.5B Gas Distribution $0.5B Liquids Pipelines $0.5B through through through 2025 2025 2025 Hydrogen CO2 Oil Sands & H2 H2 Studies underway QUEBEC Fort Saskatchewan across system; CO2 Post-2025; CO2 Multiple opportunities H2 Multiple
Slide 19: Renewable Power
Renewable Power Offshore Wind Strategy Up to $1.0B / year UK Germany Behind the France • Up to $1B in behind the meter Meter Strategy In operation Under construction investments in near-term; $0.3B in Awarded Expanding Onshore execution In development Footprint • ~$2.5B of potential front of the met
Slide 20: Strong Portfolio
Strong Portfolio Business Mix (2022e EBITDA by business unit) • Consistent low-risk profile • Significant operating synergies 26% Gas Transmission • Robust equity returns 58% • Increasing free cash flow generation 12% Gas Distribution • Diversified growth opportunity set Liquids Pipelines 4% Renewab
Slide 21: Capital Allocation Priorities
Capital Allocation Priorities Capital Allocation Drivers 1 Protect Balance Sheet • Preserve financial strength and flexibility 4.5x D/EBITDA2 5.0x • Ratable dividend increases up 2 Sustainable Return of Capital to medium-term DCF/s growth • Periodic share repurchases1 60% DCF1 payout 70% • Prioritiz
Slide 22: Investable Capacity
Investable Capacity ($ Billion) 2022e Adjusted EBITDA1 $15.0-$15.6 Less: Cash Requirements2 ~($4.5) Distributable Cash Flow1 ~$11B Less: Dividends ~($7.0) (~65% payout) Add: Annual Debt Capacity3 ~2.0 Investable Capacity $5-6B Expect to generate $5-6B of annual investable capacity (1) Adjusted EBITD
Slide 23: Capital Allocation Framework
Capital Allocation Framework ($5-6B of Annual Investable Capacity) High Priority Investments Deploy Incremental Capacity Core Drive Sustainable Long- Excess to Drive Additional Growth Allocation Term Growth Allocation and Value $3-4B • Enhance returns from existing ~$2B Other Organic Growth annually
Slide 24: Visible 3-Year Plan Outlook
Visible 3-Year Plan Outlook DCF/share1 Post-2024 Cash Flow Growth Drivers: 5-7% 1. Revenue inflators & productivity CAGR through enhancements Deploy 2024 Excess Revenue Execute Capacity 2. $3-4B of core capital allocation Secured Inflators & Capital Productivity Program 3. ~$2B of additional capital
Slide 25: Value Proposition
Value Proposition • Resiliency and longevity of cash flows <4.7x debt to EBITDA; BBB+ credit rating • ESG Leadership Up to $6B of annual organic capital investments • Strong balance sheet Highly visible 5-7% • Growing investable free cash flow DCF/s growth through 20241 • Solid conventional long-ter
Slide 26: Advancing Strategic Priorities
Advancing Strategic Priorities
Slide 27: 2022 Mid-Year Business Update
2022 Mid-Year Business Update Liquids Gas Gas Distribution Renewables Pipelines Transmission & Storage 30% of N. America’s oil 20% of natural gas consumed ~2 Tcf of natural gas delivered; 2.2 GW3 renewable energy transported and exported in the U.S. Serving 75% of Ontarians serving ~900,000 homes •
Slide 28: Secured Capital Program
Secured Capital Program Project Expected ISD Capital ($B) Modernization Program 2022-2025 2.2 USD Other Expansions 2022-2025 0.5 USD Gas Transmission Venice Extension1 2023-2024 New 0.4 USD T-North Expansion 2026 New 1.2 CAD Woodfibre LNG2 2027 New 1.5 USD Distribution System 2022-2024 1.7 CAD Gas D
Slide 29: Mainline Commercial Update
Liquids Pipelines Gas Transmission Gas Distribution Renewables Mainline Commercial Update Mainline Negotiation Timeline Dec 2021 Mid 2022 Late 2022 Mid 2023 Late 2023 Stakeholder Consultation, Information Sharing & Shipper Negotiation Evaluate best path forward 1) Incentive Tolling Option Mid-2023:
Slide 30: Ingleside Terminal Developments
Liquids Pipelines Gas Transmission Gas Distribution Renewables Ingleside Terminal Developments Houston Area 1) Crude Oil Storage & Export Expansion – Late-stage development TETCO – ~2 mmbbls expansion (increase capacity to 17 mmbbls) 2) Developing Additional Export Products New – NGL export opportun
Slide 31: Carbon Capture & Storage
Liquids Pipelines Gas Transmission Gas Distribution Renewables Carbon Capture & Storage Open Access Wabamun Carbon Hub Milestones Illustrative Today 2023 2024 2025 2026 2027 Alexander Awarded Geological Validation Alexis Nakota Fort Sioux Nation First Nation Evaluation Regulatory Review FORT Rights
Slide 32: JV Merger with Phillips 66
Liquids Pipelines Gas Transmission Gas Distribution Renewables JV Merger with Phillips 66 Realignment of Economic Interests Announced August 17, 2022 Transaction Overview Merge two existing JVs with Phillips 66 Optimize economic interests; decreased Indirect Economic Interests1: Pre Post Pre Pos
Slide 33: Advancing USGC Oil Export Strategy
Liquids Pipelines Gas Transmission Gas Distribution Renewables Advancing USGC Oil Export Strategy +2MMbls In development Benefits of Increased Ownership of supply through 2040 Increased exposure to competitive, abundant and growing Permian Permian supply Will assume operating and commercial resp
Slide 34: USGC LNG Position and Strategy
Liquids Pipelines Gas Transmission Gas Distribution Renewables USGC LNG Position and Strategy USGC Market Pull • TETCO expansion • Strong incumbent network • Greenfield pipeline 1. Venice Extension1 • New connections • Plaquemines LNG TX • Visible organic growth • US$0.4B TETCO expansion • Reached p
Slide 35: T-North Pipeline Expansions –Secured Project
Liquids Pipelines Gas Transmission Gas Distribution Renewables T-North Pipeline Expansions –Secured Project WCSB Supply Growth1 • Low cost Montney basin provides economic supply (Bcf/d) N-4 (<$2/mmbtu) ~24 • Successful binding open season concluded in June 16 N-5 • Expanding system by 535 mmcf/d 202
Slide 36: T-South Pipeline Expansion
Liquids Pipelines Gas Transmission Gas Distribution Renewables T-South Pipeline Expansion T-North Existing Enbridge Pipelines T-South Pipeline • ~300 mmcf/d expansion requirement Enbridge Compressor Station Fort Taylor STATION 2 St.John Fortis Pipeline CS-2B Chetwynd Capacity – Existing long-term co
Slide 37: Woodfibre LNG Investment
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Investment T-North N-2 N-3 Investment Overview2 Strategic Fit BC N-4 N-5 Fort Taylor • 30% preferred equity interest Direct connection to STATION 2 CS-2B St.John pipeline assets McLeod Lake CS-3 Chetwynd Dawson Creek • Pro-
Slide 38: Woodfibre LNG Project Overview
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Project Overview Indigenous Engagement Overview: Extensive, meaningful consultation Liquefaction Plant with Indigenous peoples • 2.1 mtpa production Unique and innovative relationship capacity with the Squamish Nation •
Slide 39: Woodfibre LNG Fundamentals
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Fundamentals Growing Asian LNG Demand1 Advantaged Shipping Costs2 LNG Export Breakevens3 MMtpa Delivered to Asia Breakevens ($/mmbtu) 570 Estimated 600 500 ~50% ~5-6 weeks cost range reduction in shipping 400 emissions ~4 w
Slide 40: Woodfibre LNG Execution Plan
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Execution Plan Construction Overview Execution Timeline • Modular plant construction • Squamish EA2 certificate Pre- • Federal EA approval • Lump sum turn-key received 2022 • Provincial EA certificate EPC contract approved
Slide 41: Gas Distribution Update
Liquids Pipelines Gas Transmission Gas Distribution Renewables Gas Distribution Update Capital Program Sanctioned Panhandle Expanding Utility Portfolio: in Execution Expansion RNG and Hydrogen Current Existing Proposed DAWN HUB projects reduce ONTARIO ONTARIO 93,000 tCO e 2 emissions annually 19 km
Slide 42: Renewables Update
Liquids Pipelines Gas Transmission Gas Distribution Renewables Renewables Update Offshore Wind Portfolio Solar Self-Power Projects Renewable Growth Potential (Gross GW)1 >1.3 GWs Alberta Solar One 10 Onshore Wind UK 10.5 MW Offshore Wind Lambertville, NJ potential2 8 Solar 2.25 MW Germany Heidlersbu
Slide 43: 2022 Financial Performance Update
2022 Financial Performance Update
Slide 44: 2022 Mid-Year Capital Allocation Update
2022 Mid-Year Capital Allocation Update Growing Free Cash Flow Balance Sheet Ratings Reaffirmed Adjusted EBITDA1 Baa1 Moody’s May ≤4.7x Stable S&P Global BBB+ March Stable DBRS BBB High July Stable 2021 2022e on track to achieve guidance Debt/EBITDA; by year end 2022 Fitch Ratings BBB+ April Stable
Slide 45: Year-to-Date Financial Performance
Year-to-Date Financial Performance Q2 YTD ($ Millions, except per share amounts) 2022 2021 2022 2021 Quarterly Drivers Liquids Pipelines 2,095 1,844 4,312 3,725 Gas Transmission & Midstream 1,084 935 2,142 1,942 Operational performance Gas Distribution & Storage 422 461 1,096 1,107 127 113 287 267
Slide 46: 2022 Full Year Outlook
2022 Full Year Outlook EBITDA Guidance1 DCF/share Guidance1 ($Billions) $5.20 – $5.50 Tailwinds/Headwinds to $15.0 – $15.6 Full-Year Guidance $4.96 $14.0 • Strong operating performance & system utilization • Energy Services • Rising interest rates 2021 2022e 2021 2022e On track to achieve full-year
Slide 47: For More Information
For More Information Gas Distribution and Storage: Events and Presentations – Enbridge Day 2021 Gas Transmission and Midstream: Events and Presentations – Enbridge Day 2021 Liquids Pipelines: Events and Presentations – Enbridge Day 2021 Renewable Power: Events and Presentations – Enbridge Day 2021 E
Slide 48: Contact Information
Contact Information Andrew Swales Director, Investor Relations 1-800-481-2804 Investor.Relations@enbridge.com