Enbridge Inc. · TSX:ENB
Enbridge — Investor Day (December 2022)
51 slides from Enbridge's investor day presentation, December 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 December 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 Flows1 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
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 ~$11B 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
Slide 9: 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) $15.9- $15.0-16.5 $3.55 15.6 $3.44 12.0% 9.0% 9.3% $0.66 $2.5 08 22e 23e 08 22 23e Midstream S&P 500 Enbridge Peers Our approach has yielded sup
Slide 10: 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 11: Our Dual-Pronged Strategy
Our Dual-Pronged Strategy Core Growth Low-Carbon Growth Optimize / Exports Modernize Solar/ RNG H2 CCS Expand Assets Wind Liquids 1 Pipelines Gas 1 Transmission Gas Distribution Renewable Power Our strategies focus on conventional and low-carbon growth opportunities (1) Solar self-power program 11
Slide 12: Predictable Organic Growth
Predictable Organic Growth Executing on Secured Up to $6B/year of Organic Growth Potential Growth (2022-2024) Supplements 2022-2024, drives post-2024 growth Gas Transmission Gas Distribution $8B $17B up to ~$2.0B/year up to ~$1.5B/year • System modernization • System modernization • Capital efficien
Slide 13: 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 14: 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 15: Liquids Pipelines
Liquids Pipelines Existing Operating Up to $1.0B / year Leverage1 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 Gro
Slide 16: 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 CO2 Oil Sands & H2 Hydrogen H2 QUEBEC Fort Saskatchewan Studies underway CO2 Post-2025; across system; CO2 H2 Multiple projects in Multiple op
Slide 17: 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 In development Expanding Onshore execution In tender process Footprint • ~$2.5B of potential front
Slide 18: Accelerating N.A. Onshore Renewables Strategy
Accelerating N.A. Onshore Renewables Strategy TGE Transaction N.A. Onshore Portfolio • Completed acquisition of Tri Global Energy (TGE) (Net GW) >3x potential – Purchase price: US$270MM growth in N.A. renewable portfolio • 3.9 GW of projects conditionally sold to 3rd parties Pre-Acquisition Portfoli
Slide 19: 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 20: 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 21: 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 22: Value Proposition
Value Proposition • Resiliency and longevity of cash flows ≤4.7x debt to EBITDA; BBB+ credit rating • ESG Leadership Up to $6B of annual organic capital investments • Strong balance sheet Visible 5-7% • Growing investable free cash flow DCF/s growth through 20241 • Solid conventional long-term growt
Slide 23: Advancing Strategic Priorities
Advancing Strategic Priorities
Slide 24: 2022 Business Update
2022 Business Update Gas Gas Distribution Renewables Liquids Transmission & Storage Pipelines 20% of natural gas consumed ~2 Tcf of natural gas delivered; 2.2 GW1 renewable energy ~30% of N. America’s oil in the U.S. Serving 75% of Ontarians serving ~900,000 homes transported and exported • Advancin
Slide 25: Secured Organic Capital Program
Secured Organic Capital Program Project Expected ISD Capital ($B) Modernization Program 2022-2025 2.2 USD Other Expansions 2022-2025 0.5 USD Secured Capital ($ Billions by in service date) Venice Extension1 2023-2024 0.4 USD Gas Transmission $10.4 T-North Expansion (Aspen Point) 2026 1.2 CAD Woodfib
Slide 26: Liquids Pipelines Update
Liquids Pipelines Gas Transmission Gas Distribution Renewables Liquids Pipelines Update Mainline Tolling +500 kbpd1 • Two commercial options: – Incentive Tolling Settlement – Cost of Service +350 kbpd • Negotiations continuing • Expansion optionality once a tolling Express framework is determined +6
Slide 27: 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 – NGL export opportunitie
Slide 28: 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 29: 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 30: 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 31: Regional Oilsands Indigenous Partnership
Liquids Pipelines Gas Transmission Gas Distribution Renewables Regional Oilsands Indigenous Partnership Regional Oil Sands Partnership Overview Norealis Athabasca Terminal Terminal Cheecham Terminal WBE-APT (Line 45) Athabasca (Line 19) Norlite Diluent (Line 74) Sunday Creek Waupisoo (Line 18) Termi
Slide 32: 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 33: T-North Expansions
Liquids Pipelines Gas Transmission Gas Distribution Renewables T-North Expansions Enbridge B.C. Pipeline System Aspen Point Program (Sanctioned Q2) • 535 MMcf/d expansion AK BC – Pipeline looping and new compression WCGT N-4 • ~$1.2B of capital under cost-of-service rates Ksi Lisims T-North LNG N-5
Slide 34: T-South Pipeline Expansion
Liquids Pipelines Gas Transmission Gas Distribution Renewables T-South Pipeline Expansion Newly Secured Organic Project Enbridge B.C. Pipeline System • Successful binding open season WCGT T-North Fort Taylor • Expanding system by 300 MMcf/d STATION 2 St.John Prince Rupert CS-2B PTP CS-3 Dawson – Loo
Slide 35: Woodfibre LNG Investment
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Investment T-North N-2 N-3 Investment Overview2 Strategic Fit BC N-4 Fort N-5 Taylor • 30% preferred equity interest Direct connection to STATION 2 St.John CS-2B pipeline assets McLeod Lake CS-3 Chetwynd Dawson Creek • Pro-
Slide 36: Woodfibre LNG Project Overview
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Project Overview Indigenous Engagement Overview: Extensive, meaningful consultation Liquefaction Plant with Indigenous peoples • 2.1 mtpa production Unique and innovative relationship capacity with the Squamish Nation •
Slide 37: Woodfibre LNG Fundamentals
Liquids Pipelines Gas Transmission Gas Distribution Renewables Woodfibre LNG Fundamentals Growing Asian LNG Demand1 Advantaged Shipping Costs2 LNG Export Breakevens3 MMtpa Delivered to Asia Breakevens ($/mmbtu) 570 Estimated 600 500 ~50% ~5-6 weeks cost range reduction in shipping 400 emissions ~4 w
Slide 38: 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 39: 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 40: Renewables Update
Liquids Pipelines Gas Transmission Gas Distribution Renewables Renewables Update Offshore Wind Portfolio Solar Self-Power Projects Renewable Growth Potential (Net GW)1 >1.3 GWs 8 ~5 Alberta Solar One ~7 UK 10.5 MW North America Lambertville, NJ potential1 2.25 MW 6 Europe Germany Heidlersburg, PA Fé
Slide 41: 2022 Financial Performance Update
2022 Financial Performance Update
Slide 42: Capital Allocation Priorities Unchanged
Capital Allocation Priorities Unchanged 1 Protect Balance Sheet 2 Sustainable Return of Capital 3 Further Organic Growth $11B Of capital recycling $7B Dividends paid in 2022 ~$8B New secured growth ($2.8B since mid 2021) capital in 2022 BBB+ Credit rating across all $1.5B Buyback program $17B Secure
Slide 43: Year-to-Date Financial Performance
Year-to-Date Financial Performance Q3 YTD Quarterly Drivers ($ Millions, except per share amounts) 2022 2021 YoY 2022 2021 YoY Liquids Pipelines 2,269 1,898 6,581 5,623 Operational performance Gas Transmission & Midstream 1,158 986 3,300 2,928 Gas Distribution & Storage 293 296 1,389 1,403 L3R2
Slide 44: 2022 Full Year Outlook
2022 Full Year Outlook EBITDA Guidance1 DCF/share Guidance1 ($Billions) $5.20 – $5.50 Tailwinds/Headwinds $15.0 – $15.6 $4.96 to Full-Year Guidance $14.0 Strong operating performance & system utilization Stronger USD Energy Services Higher power costs Rising interest rates 2021 2022e 2021 2022e On t
Slide 45: 2023 Financial Guidance
2023 Financial Guidance Adjusted EBITDA1 DCF/share1 Dividends/share ($B) $15.9 – $5.25 – $15.0 – $5.20 – $5.65 • Strong growth across the $16.5 $5.50 $15.6 $3.34 $3.44 $3.55 business (8% EBITDA $4.97 $14.0 CAGR vs. 2021) • 28th consecutive dividend increase • Strong balance sheet; lower end of Debt-
Slide 46: 2023 EBITDA Guidance
2023 EBITDA Guidance ($ Millions) 2023e Growth Drivers vs. 2022 Guidance Strong Mainline utilization Liquids Pipelines ~9,000 Increased interest in Gray Oak & Cactus II New assets placed into service Gas Transmission & Midstream ~4,300 TETCO rate settlement Gas Distribution & Storage ~1,950
Slide 47: 2023 DCF Guidance
2023 DCF Guidance ($ Millions) 2023e Drivers vs. 2022 Guidance Adjusted EBITDA1 (from prior slide) $15,900-$16,500 Maintenance Capital ~(1,000) Financing Costs ~(3,900) Higher interest rates & new issuances Current Income Taxes2 ~(500) Higher earnings Distributions to Non-controlling Interests ~
Slide 48: 2023 Planning Parameters
2023 Planning Parameters Base Business: • Embedded revenue growth, robust system utilization, & cost Quarterly Profile EBITDA & DCF2 management • Mainline tolling provision consistent with 2022 • Mainline volume: ~3.0Mbpd • Secured project capital only; ~$3B to enter service in 2023 Key Sensitivitie
Slide 49: Equity Self-Funded Model
Equity Self-Funded Model 2023 Funding Plan Industry-Leading Credit Ratings ($ Billions) Rating Business Risk ~$5 Debt Maturities ~$6 Baa1 Debt Funding “Low business risk” Stable ~$5 Secured Growth Capital BBB+ “Excellent” Stable ~$7 ~$12 Internal Common Share Cash Flow1 BBB High “Low-risk diversifie
Slide 50: 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 51: Contact Information
Contact Information Rebecca Morley Director, Investor Relations 1-800-481-2804 Investor.Relations@enbridge.com