Enbridge Inc. · TSX:ENB
Enbridge — Investor Presentation (June 2021)
71 slides from Enbridge's investor presentation, June 2021
Slide 1: Bridge to the Energy Future
Bridge to the Energy Future Enbridge Inc. Investment Community Update (TSX: ENB; NYSE: ENB) June 2021
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 – The Bridge to the Energy Future
Enbridge – The Bridge to the Energy Future Four Blue Chip Franchises UK of N. America’s crude oil transported Belgium Liquids 25% • #1 by miles of pipe France Germany Gas of natural gas consumed in the U.S Transmission 20% • #2 by miles of pipe Business Mix (2020 EBITDA by business unit) Gas of natu
Slide 4: Resilient Business Model
Resilient Business Model 40+ Diversified Sources of Industry-leading Financial Predictable & Growing Cash Flow Risk Profile Cash Flows Financial Commodity Alberta COVID Crisis Price Forest 19 Collapse Fires Gas 98% 95% $16,000 $100 COS/ of customers are $14,000 WTI Transmission Contracted/ Investmen
Slide 5: Long-term Value Creation
Long-term Value Creation Predictable Results Reliable Dividend Growth Leading 25 Year TSR ($CAD/share) (as of March 2021) 15% 10% Enbridge 26 Year Dividend 10% CAGR 10% Midstream 8% S&P 500 Peers S&P TSX Adjusted Earnings/share DCF/share1 2006 2021e 1995 2021e Guidance range Actual results Our low-r
Slide 6: Longevity of Cash Flows
Longevity of Cash Flows Gas Transmission Gas Distribution Liquids Pipelines Serves >170MM people in regional markets Serves >14MM people in utility franchise Serves >12MMBPD of refining capacity 15 bcfd Current demand Gas-fired plant attached ONTARIO ~1 mmbd 4 ~1 bcfd 14 0.3 mmbd 18 bcfd OTTAWA mmbd
Slide 7: Renewable Power
Renewable Power 20+ Utility 8.4 GW 1 Business Model Capabilities2 Scale Facilities in operation & under development Long term PPAs Operating Equivalent Capacity1 homes served Samples (MW) (‘000s) Strong returns Hohe See & Albatros 609 700 Rampion 400 315 Minimize risk Fécamp 500 405 • Markets • Oper
Slide 8: Disciplined, Gradual Approach to Transition
Disciplined, Gradual Approach to Transition 1949 2010 2020 3% Renewable Power 2% & Other Asset Mix: 100% 33% 65% 43% 54% Natural Gas Liquids Transmission, Pipelines Dist. & Storage EV: $75 MM* $40 B $160 B Approach to Transition Transitioning the Business 1996: Acquired Consumers’ Gas utility Align
Slide 9: Global Energy Consumption Will Increase
Global Energy Consumption Will Increase World Urbanization Middle class Growing Per Capita Energy Use population GDP Per Capita ($M, 2016) +21% +41% +67% 60 9.1B 5.8B 5B Germany U.S. 7.5B 4.1B 3B 45 U.K. France Canada Japan 30 Argentina 15 India China Relative Size of Economy Africa (Nominal 2019 GD
Slide 10: All Energy Sources Needed
All Energy Sources Needed Primary Energy Demand1 Society Depends on Affordable & Reliable Energy (Gtoe) ~90% of 80%+ of Hydrogen will take +20% petrochemical energy end-use demand time to be cost competitive3 needs met by crude oil for oil has limited 8% & natural gas1 alternatives1 Renewables 2% 14
Slide 11: N. America Positioned to Meet Demand
N. America Positioned to Meet Demand Liquids supply1 Natural gas outlook1 N. American Energy Advantage (MMb/d) (Bcf/d) 124 126 127 • Abundant, reliable crude oil and 28 29 27 LNG natural gas resources 25 112 Exports Exports N.A. • Most globally competitive Demand refineries and petrochemical N.A. De
Slide 12: Industry Leading ESG Performance
Industry Leading ESG Performance Environmental Social Governance ENB Top Sector ESG Ratings S&P Global Top among N.A. What we’ve accomplished: Ratings midstream peers • Set and met GHG • $1B of Indigenous • 4 Board committee chairs are May reductions targets1 spend over last decade women MSCI ESG A
Slide 13: Pathways to Achieving Emissions Goals
Pathways to Achieving Emissions Goals Modernization Decarbonizing Self-Power Emissions & Innovation The Grid With Renewables Offsets • Modernize equipment • Utilizing lower carbon • Solar self-powering of • Planting trees across the footprint fuel sources to operate electric pump and • Soil carbon s
Slide 14: Positioned For Low-Carbon Opportunities
Positioned For Low-Carbon Opportunities Renewable Hydrogen Blending Carbon Capture Natural Gas Power-to-Gas Hydrogen & Storage • Technology and business Capitalizing on future of hydrogen through gas distribution • Leverage liquids and natural model well-advanced and transmission businesses gas pipe
Slide 15: Enbridge Growth Buckets
Enbridge Growth Buckets Primary Emphasis Through 2023 2023+ Enhance Returns Execute Secured Further Organic 1 from Existing Business 2 Capital Program 3 Opportunities • Zero-capital capacity and Complete $11B of existing Enhance returns from throughput optimization secured growth capital existing bu
Slide 16: Strengthening Our Base Business
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Strengthening Our Base Business Regulatory Updates Productivity Improvements Built-in Revenue Escalators (% of EBITDA) Optimizing Power Regulatory Texas Eastern • + ~C$125MM EBITDA Terminal Flow
Slide 17: $17B Secured Program Through 2023
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity $17B Secured Program Through 2023 Expected Spent to Project ISD Date1 ($B) Capital ($B) Incremental EBITDA Liquids Line 3R – U.S. Portion 2021 2.8 USD 4.0 USD Growth from Secured Pipelines Southe
Slide 18: Construction on Secured Capital Program
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Construction on Secured Capital Program Gas Transmission Gas Distribution & Storage Renewable Power $5B in execution through 2023 $3B in execution through 2023 $3B in execution through 2023 • $3B
Slide 19: Line 3 Replacement Update
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Line 3 Replacement Update • Parallel execution on 5 spreads and 8 facilities on schedule • Planned pipeline construction pause (April-early June) • Strong Covid-19 protocols • Local social & econ
Slide 20: 3 Year Cash Flow Growth Outlook
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity 3 Year Cash Flow Growth Outlook 2021-2023 DCF/share1 ~$5-6B of Annual Financial Capacity ~4-5% 5-7% DCF/s1 CAGR Debt $4.67 ~1-2% through 2023 Capacity2 Enhance Returns Execute $17B Secured Capita
Slide 21: Post-2023 Organic Opportunity Set
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Post-2023 Organic Opportunity Set Ireland Offshore Wind UK Development Germany Westcoast LNG France Exports Solar Self-Powering Utility Franchise Growth Further Egress Opportunities Connect Power
Slide 22: Approach to Capital Allocation (2022+)
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Approach to Capital Allocation (2022+) Priorities Deployment of $5-6B of Annual Financial Capacity 1 Preserve High Priority Investments Deployment of Incremental Financial Strength Drive Sustaina
Slide 23: Long-term Growth Outlook
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Long-term Growth Outlook 5-7% DCF/s Growth Post-2023 Cash Flow Growth Drivers: 1 Continue to enhance returns on existing assets – 1-2% annually 2 Core capital allocation: high priority, low capit
Slide 24: Our Low-Risk Value Proposition
Our Low-Risk Value Proposition • Resiliency and longevity of cash flows Yield • Attractive dividend yield ~7% • Growing investable free cash flow • Strong balance sheet • Enhance asset returns Growth • Grow organically ~5-7% • Transparent long-term growth outlook • Shareholder returns • Leading ener
Slide 25: 2021 Financial Outlook
2021 Financial Outlook CENBRIDGE
Slide 26: 2020 Accomplishments
2020 Accomplishments Strong operational performance; Delivering on Our Commitments Historic Guidance Achievement Full-year DCF/share above guidance mid-point $4.50 $4.00 $1.6B of capital projects placed into $3.50 service $3.00 $2.50 Increased ESG goals; emissions, $2.00 diversity & inclusion $1.50
Slide 27: Financial Strength & Flexibility
Financial Strength & Flexibility Entering 2020 Exited 2020 Average Credit Rating BBB+ Global BBB+ disruption Available Liquidity ~$9B from ~$13B COVID-19 Incremental Cost Management - $300M+ cost reduction % of customers with Investment Grade Rating1 ~93% ~95% % regulated, take-or-pay, CTS2 ~98% ~98
Slide 28: 2021 Parameters
2021 Parameters Base Business: • Embedded revenue growth and cost management • Further recovery in Mainline light volumes; heavy fully utilized ˗ Average of 2.8 mmbpd 1 (Q1: 2.7 mmbpd) • Assume interim tolls after June 30th at CTS exit rate Capital Projects: • Secured project capital only • Line 3 R
Slide 29: 2021 EBITDA Guidance
2021 EBITDA Guidance 2021e ($ millions) Growth drivers vs. 2020 Mainline volume recovery Liquids Pipelines ~7,800 Line 3R U.S. in service Q4 2021 Recognition of make-up-rights Gas Transmission ~3,800 New assets placed into service Rate escalation, new customer adds, synergies Gas Distribut
Slide 30: 2021 DCF Guidance
2021 DCF Guidance 2021e ($ Millions) 9-Month Sensitivities to Plan Monthly DCF Impact ($ Millions) Adjusted EBITDA1 (from prior slide) $13,900-$14,300 Maintenance Capital ~(900) L3R U.S. ISD ($75) $75 +/- 1 month Financing Costs ~(3,200) Current Income Taxes2 ~(500) Mainline Volume ($12) $12 +/- 100
Slide 31: 2021 Outlook – On Track
2021 Outlook – On Track • Effective Covid19 management protocols Operational • Operations near fully utilized in Q1 • Managed through Storm Uri • $10B of capital progressing on schedule for 2021 in-service Execution • Continue to advance productivity improvements • Full-year 2021 DCF/s and EBITDA gu
Slide 32: 2021 Financial Outlook
2021 Financial Outlook EBITDA Guidance1 DCF/share Guidance1 ($B) $13.9 - $14.3 $4.70 - $5.00 Tailwinds/Headwinds to $13.3 $4.67 Full Year Guidance • Strong Q1 performance • Robust system-wide utilization • Energy Services • Weaker USD2 (Largely hedged) 2020 2021e 2020 2021e Reaffirming 2021 EBITDA a
Slide 33: 2021 Funding Plan
2021 Funding Plan 2021 Funding Plan Strong Financial Industry-Leading Credit ($B) 6.0x Position (Debt/EBITDA) Ratings3 Reaffirmed rating on: ~$3 5.5x Debt Maturities ~$5 Target Range: 4.5x – 5.0x2 BBB+ Debt Funding 5.0x Dec. 2020 stable ~$7 ~$2 4.5x 4.6x Secured Growth 2020 Pre-Funding BBB+ April 20
Slide 34: Appendix – Business Details
Appendix Business Details CENBRIDGE
Slide 35: Liquids Pipelines
Liquids Pipelines
Slide 36: Premier Liquids Pipeline Franchise
Premier Liquids Pipeline Franchise 3.1 mmbpd Demand Pull from Premium Markets Highly Predictable • Fully integrated Cash Flow (2020 EBITDA) Transports Access to Transports system essential ~25% >75% ~67% to N. American Supply 12% Long Term of all crude oil of Canadian push Regional Oil Sands Take-or
Slide 37: Crude Energy Fundamentals
Crude Energy Fundamentals Global Refined Product Global Crude Oil Demand Annual U.S. Crude Demand1 Outlook2 (mmbpd) Exports3 (annual average, mmbpd) (mmbpd, % growth relative to 2019 demand) +3% 120 4.0 Pre-COVID-19 25.0 +2% 20.0 90 3.0 15.0 +2% Base Case Scenario 10.0 Second Wave Scenario 60 2.0 -7
Slide 38: Line 3 Replacement Update
Line 3 Replacement Update • Parallel execution on 5 spreads and 8 facilities on schedule • Planned pipeline construction pause (April-early June) • Strong Covid-19 protocols • Local social & economic value – Over 5,000 jobs created – ~US$180MM of Tribal spending • Toll surcharge increases to US$0.93
Slide 39: Mainline Contracting
Mainline Contracting Striking a Balance Contracting Timeline Cost of Service Alternative Refiner / Integrated Impact to Enbridge Benefit Producer Producer Dec 19, 2019 Filed Application with CER Enhances low-risk Reasonable risk- Secures Public Comment Supply/Demand for utility-like business adjuste
Slide 40: Line 5 Update
Line 5 Update Critical Infrastructure Great Lakes Tunnel Project ON QC Additional Uses Ventilation Duct (e.g. Fiber Optics) Superior Pipeline Line 5 MN WI MI Tunnel Sarnia Design PA OH • EGLE2 Permits Awarded State Permitting: • MPSC3 Approval (In Progress) • Delivers 540 kbpd of crude and NGLs Fede
Slide 41: Integrated Value Chain Drives Growth
Integrated Value Chain Drives Growth OIL SANDS (WCSB) Strategic Focus Areas 1 Capture Oil Sands growth through 1 low-cost Mainline expansions Expand and extend our heavy BAKKEN 2 advantage to meet USGC demand 2 Port Arthur 3 Extend export market reach 2 Texas City NIOBRARA (ROCKIES) Investment Crite
Slide 42: Capital Efficient Expansion and Extension
Capital Efficient Expansion and Extension ~600 Regional Oil Sands kbpd Regional Oil Sands ~$5B • Forecasted oil sands growth requires regional infrastructure Potential opportunities • Up to 600kbpd of highly capital efficient expansions +450 kbpd Egress Capacity Options Egress Capacity Market Access
Slide 43: Terminal and Export Infrastructure
Terminal and Export Infrastructure Enbridge Houston Oil Terminal • Emerging and deepening market in Houston as a ~$2B Seaway Houston source for global heavy crude supply of opportunities • Need for a fully integrated heavy crude storage and blending terminal hub in Houston SeaPort Oil Terminal (SPOT
Slide 44: Liquids Pipelines - Summary
Liquids Pipelines - Summary Enhance Returns from Existing Business • N. American crude oil is critical to • Continued system optimizations long-term global demand • Maximize efficiencies • Toll escalation • Our system connects to the most • Contract the Mainline competitive refineries globally Execu
Slide 45: Gas Transmission
Gas Transmission
Slide 46: Unparalleled Footprint
Unparalleled Footprint • Well-positioned to participate in growing markets, both >170 domestic and export million people • Last mile connectivity to major urban centers served by our system 7 • Competitive scale and tariffs bcfd 3 • Demand-pull from investment grade utilities and bcfd integrated ene
Slide 47: Essential Low-Cost Energy Source
Essential Low-Cost Energy Source Natural gas primary fuel for power generation Most economic source of heating New England 40% Relative cost of heating an 326% average home in New England More expensive Natural Gas2 than gas PJM $4,606 37% Peak Day1 Natural Gas Natural Gas2 71% Coal Nuclear Natural
Slide 48: LNG Export Opportunities
LNG Export Opportunities N. American LNG Export Competitiveness N. American LNG Market Share mmtpa Resource life Cost to produce 200 Geopolitical stability Access to capital N. American LNG Capacity 150 Enbridge Strategic Fit 100 Qatar Leverages existing Enhances system network utilization Russia 50
Slide 49: Executing on Secured Growth
Executing on Secured Growth Spruce Ridge | 2021 Secured Projects in Execution T-South Expansion | 2021 T-South Expansion $1.0 2021 System Modernization $2.7 2021-23 Middlesex Extension 2021 Spruce Ridge $0.5 2021 Other expansion projects1 $1.0 2021-22 Appalachia to Market 2021 PennEast | 2022+ ~$5B
Slide 50: System Modernization
System Modernization • Opportunities across footprint to upgrade existing infrastructure ~$0.9B Invested in • Improve efficiency by replacing aging the System in 2020 infrastructure and modernizing fleet • Enhanced emission standards • Costs to be recovered through $0.5-1B periodic rate proceedings
Slide 51: Power and Industrial Demand
Power and Industrial Demand Gas-fired plant attached Power Generation Market Coal-fired plant Oil-fired plant • Lower-cost and lower-emission natural gas positioned to replace aging coal facilities • Growth in renewables requires stable base N. American load gas-fired generation Industrial Demand In
Slide 52: N. American Export Opportunities
N. American Export Opportunities Cameron Venice Texas Extension Extension Expansion T-North Opportunities Eastern LA Plaquemines TX LNG LNG Cameron Pipelines LNG Sabine Pass Calcasieu AB LNG Pass LNG BC Expansion Freeport ENB pipelines Opportunities Rio Bravo LNG T-South ENB connected/contracted Pip
Slide 53: Gas Transmission - Summary
Gas Transmission - Summary • Affordable and reliable natural gas Enhance Returns from Existing Business • Rate strategy is vital to meeting N. American • Cost management energy needs • Technological advancements • Our network provides last-mile connectivity from supply basins to Execute Secured Capi
Slide 54: Gas Distribution & Storage
Gas Distribution & Storage
Slide 55: Premier N. America Gas Utility Franchise
Premier N. America Gas Utility Franchise Critical infrastructure serving 5th largest Service population center in N. America ~75% 2nd ~3.8 largest storage million meter of Ontario’s hub in connections ONTARIO 14 million N. America in Ontario people Largest Natural Gas Utility in N. America OTTAWA by
Slide 56: Unassailable Natural Gas Fundamentals
Unassailable Natural Gas Fundamentals Critical Reliable Affordable Ontario’s Residential & Ontario’s Industrial Ontario Peak Energy Demand Comparable Residential Commercial Space Process Load1 (MW) Annual Heating Bills Heating Load1 ($/year) 84,261 84,261 Subsidies $2,597 Natural gas 12% 20% infrast
Slide 57: Incentive Regulatory Framework
Incentive Regulatory Framework • 5-year term (2019-2023) Incentive Rate Structure Synergy Capture with rebasing in 2024 10% (in $MM) Achieved ROE Expected range • 2021 rate increased by 1.7%; of Achieved ROE $300 8% allowed return of 8.34% • Earn 100% on the first 150 bps 6% $200 above the OEB appro
Slide 58: Ratable Growth Through 2023+
Ratable Growth Through 2023+ • Customer growth and community expansion – ~45K new customer additions annually ~$3B ONTARIO Gatineau1 Hydrogen Blending | 2023 St. Laurent Replacement | 2022 Utility growth – Over 200 expansion projects capital in execution Dufferin RNG from 2021-23 2021 OTTAWA • Syste
Slide 59: Low Carbon Gas Technology Trends
Low Carbon Gas Technology Trends Strong History of Innovation Benefits of RNG and N. America RNG Hydrogen Growth Outlook (Bcf/d) Replacement of cast iron pipes RNG Reduced GHG emissions 21% below 1990 levels1 • Reduces CO2 emissions grows to Early 90s 1-3% Demand Side Management program • Leverages
Slide 60: Our Position Today
Our Position Today Renewable Compressed Behind Hydrogen Power Natural Gas Natural Gas the Meter to Gas & Blending Description From organic landfill waste For transport market and Technology in development Hydrogen blending in utility or anaerobic digesters remote customers including gas heat pumps,
Slide 61: Strong, Ratable and Highly Economic Utility Rate Base Growth
Strong, Ratable and Highly Economic Utility Rate Base Growth • Reliable and cost-effective Enhance Returns from Existing Business • Amalgamation synergies natural gas is critical to Ontario’s • Revenue escalators energy supply • Productivity • Regulatory model provides Execute Secured Capital Progra
Slide 62: Renewable Power
| Hehe | bir h CENBRIDGE
Slide 63: Renewable Power Footprint
Renewable Power Footprint Onshore Wind Solar & Other Offshore Wind Power Capacity • 2.4 GW (1.4 GW net) • 225 MW (120 MW net) • 2.4 GW (0.6 GW net) & equivalent homes powered by renewables • ~410,000 homes • ~31,000 homes • ~495,000 homes Asset portfolio1: Investment • $3.1 billion • $0.5 billion •
Slide 64: European Offshore Wind Focus
European Offshore Wind Focus Key Drivers: Global OSW1 Installed Capacity Forecast (GW) • Countries replacing traditional coal 180 generations and other retiring capacity 160 +64GW U.S. 140 • Need to add more power to the grid for 120 Other Asia growing population and energy needs 100 +61GW Other E.U
Slide 65: Maximizing Project Returns
Maximizing Project Returns Uniquely Positioned to Returns by Development Phase Compete in Offshore Wind Shifting towards early-stage entry to maximize returns • Strong execution track record • Capture development premium • Focus on regions where contracts are available • Secure local partners that h
Slide 66: Disciplined Approach
Disciplined Approach Hohe See & Albatros Rampion Saint Nazaire Fécamp Calvados Country Capacity 609 MW 400 MW 480 MW 500 MW 448 MW Project costs C$1.1B C$0.8B C$0.9B3 C$0.7B3 C$0.9B3 Commercial 20-year fixed-price 15-year PPA + ROC 20-year fixed-price 20-year fixed-price 20-year fixed-price framewor
Slide 67: Offshore Wind Opportunity Set
Offshore Wind Opportunity Set Under construction In development ~$3B • Dunkirk of offshore wind Ireland • Saint Nazaire in execution UK Projects • Fécamp • Rampion Extension from 2021-23 (early development) Rampion Extension | TBD • Calvados • Provence Grand Large Germany Calvados | 2024 Dunkirk | T
Slide 68: Next Frontier: Floating Offshore Wind
Next Frontier: Floating Offshore Wind • ~1/3 of the world’s population Floating OSW Potential1 Future Floating OSW Tender Locations2 lives within 100km of shoreline Share of Potential French Floating OSW • Deeper offshore areas offshore wind for floating In Development resource in wind capacity Fran
Slide 69: Self-Powering the Pipeline
Self-Powering the Pipeline Heidlersburg | 2.5 MW • Several hundred MWs of self-power generation opportunities through 2023 ~$0.5B of opportunity from 2021-23 • Near-term potential for 15-20 projects Heidlersburg • 3 projects placed into service In Operation Alberta Solar One (2.5 MW) • Sanctioned 4
Slide 70: Renewable Power - Summary
Renewable Power - Summary • Renewables will become a larger Enhance Returns from Existing Business • Maximizing productivity part of EBITDA mix over time • Optimizing returns • Centralized operations • Earlier stage development • Solid development and operations capabilities in place Execute Secured
Slide 71: Contact Information
Contact Information Jonathan Morgan Andrew Swales Vice President, Investor Relations Director, Investor Relations 1-800-481-2804 1-800-481-2804 Investor.Relations@enbridge.com Investor.Relations@enbridge.com