Enbridge Inc. is well on its way to “creating the largest natural gas utility in North America,” with opportunities galore as generation demand increases, according to CEO Greg Ebel.
During a conference call to discuss second quarter results, Ebel highlighted progress toward integrating the $9.4 billion purchase of Dominion Inc. natural gas systems in Idaho, North Carolina, Utah and Wyoming.
The multi-state transaction would effectively double the scale of Enbridge’s natural gas utility business and balance the asset mix evenly between natural gas, renewables and liquids, the CEO noted. Enbridge expects to deliver 9 Bcf/d-plus to about seven million customers through the Dominion acquisition alone.
"Asset sales are still very much part of what we look at," Ebel told investors. "But I wouldn't say there's anything near term that we have to do…If we do anything significant on the asset sale side, it will be solely as a result of getting a great price on something."
Mergers aside, Enbridge’s “large incumbent asset position allows us to provide differentiated service offerings…It's still in the early innings for us fully realizing the advantage of our vast position, but we're seeing growing opportunities across our footprint…”
Data Center Inquiries
Opportunities are linked to “increasing natural gas and renewable power demand, and their interconnectivity,” the CEO explained.
“As an example, in our Gas Utility business, data center growth in Utah is being driven by the need for reliable and affordable energy. New this quarter, we added 50 MW under contract and have numerous additional inquiries to provide natural gas for up to an additional 1.5 GW of capacity throughout our utility footprint…”
Enbridge also is in “early stage discussions with data centers that we expect to translate into future growth.”
In the Gas Transmission arm, Enbridge assets are “within 50 miles of 45% of all natural gas power generation in North America,” Ebel said. “In fact, in July, we achieved seven of our highest ever daily deliveries to U.S. power plants from our gas transmission system.
“We've had a range of customers in the U.S. Southeast express interest in securing approximately 700 MMcf/d of transmission capacity to serve up to 5,000 MW of new gas-fired demand.”
Natural gas demand will drive some – but not all – of the data center generation, Ebel said. The Renewable Power segment is going to benefit too.
“Data centers need baseload power solutions, such as natural gas to support the 24/7 energy demands of the hyperscalers, but many customers are balancing that reliability requirements with their renewable energy commitments,” the CEO noted.
“It's not always possible to co-locate or develop behind-the-meter power solutions to support new data centers…So we are having discussions with large blue-chip customers to provide traditional and virtual long-term power purchase agreements,” or PPAs.
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“Customers may look at signing long-term offtake agreements to support development of clean energy projects to offset emissions produced.”
To that end, Enbridge is developing 2 GW-plus of “regionally diverse” wind and solar projects, “which are capable of serving new data center load…in 2026 and beyond.”
During the latest quarter Enbridge sanctioned the 130 MW Orange Grove solar farm in Texas, northwest of Corpus Christi. It is backed by a long-term PPA with AT&T for 100% of capacity.
On the natural gas side of the ledger, a consortium including Enbridge recently sanctioned the Blackcomb Pipeline, designed to transport up to 2.5 Bcf/d from the Permian Basin to the Agua Dulce hub near Corpus.
Blackcomb “is expected to provide much needed egress for Permian natural gas shippers in 2026,” Ebel noted.
Enbridge, which reports in Canadian dollars (C$1.00/US 72 cents), reported second quarter earnings were nearly flat year/year at $1.8 billion (86 cents/share). Cash provided by operating activities declined to $2.8 billion from $3.4 billion. Distributable cash flow rose 3% year/year to $2.9 billion.
