Enbridge beats profit estimates, sanctions new projects to meet power demand

Pipeline operators are benefiting from a surge in demand for natural gas, driven by liquefied natural gas exports, and soaring power generation tied to increased use of artificial intelligence and data centers.

Earlier in the day, peer TC Energy also beat market expectations for quarterly profit on the back of rising natural gas demand.

Enbridge said it had C$39 billion ($28.63 billion) in project backlog, C$8 billion of which is expected to come into service this year.

The company sanctioned two renewable energy projects in the fourth quarter – a $1.2 billion project in Wyoming for a large tech company, and an onshore wind project in Texas worth $400 million to support Meta Platforms’ data center operations.

“We continue to advance over 50 data center opportunities across North America, requiring up to 10 billion cubic feet per day new takeaway capacity,” CEO Greg Ebel said, adding that the company expects to sanction additional projects in 2026 and beyond.

Enbridge posted an adjusted profit of 88 Canadian cents per share for the fourth-quarter, compared with estimates of 77 Canadian cents, according to data compiled by LSEG.

UBS analyst Manav Gupta said Enbridge “continues to prioritize balance sheet strength… while still looking into low-multiple brownfield opportunities and utility-like growth.”

The results come as the North American energy industry braces for an increase in Venezuelan oil production, which could further pressure Canadian oil prices as the country’s companies sell a similar heavy oil, analysts have said.

However, Ebel said the company does not expect any material impact from the recent geopolitical events involving Venezuela, adding that increased output from the country would be a supplement to Canadian heavy crudes, not a replacement.

($1 = 1.3620 Canadian dollars)