Enbridge 2026 Q2 Earnings Call

Good morning, and welcome to the Enbridge Inc. Second Quarter 2026 conference call. My name is Marlon Samuel, and I am the Vice President of Investor Relations and Insurance. Joining me this morning are Greg Ebel, President and CEO, Pat Murray, EVP and Chief Financial Officer, and the heads of each of our business units. Colin Gruending, Liquids Pipelines, Matthew Akman, Gas Transmission, Michele Harradence, Gas Distribution and Storage, and Allen Capps, Renewable Power. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session for the investment community. Please note this conference call is being recorded. As per usual, this call is being webcast, and I encourage those listening to follow along with the supporting slides.

We will try to keep the call to roughly one hour, and in order to answer as many questions as possible, we will be limiting questions to one plus a single follow-up if necessary. We will be prioritizing questions from the investment community. If you are a member of the media, please direct your inquiries to our communications team who will be happy to respond. As always, our investor relations teams will be available after the call for any follow-up questions. On to slide 2, where I will remind you that we will be referring to forward-looking information on today's presentation and Q&A. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We will also be referring to non-GAAP measures summarized below.

With that, I'll turn it over to Greg Ebel.

Well, thanks very much, Marlon, and good morning everyone, and thanks for joining us on the call today. We finished the first half of the year with a solid quarter 2, reflecting strong financial performance and setting us up to achieve our 2026 guidance. Utilization remained high across all four businesses, including strong Q2 Mainline volumes averaging 3.1 million barrels per day. Alongside our partners in the Gulf, we began commissioning the Blackcomb Pipeline during the quarter and are on track to bring it online by year-end. We also brought the Enbridge Houston Oil Terminal into service during the quarter, and within Liquids Pipelines, we sanctioned the Wisconsin Line 5 relocation project. In Gas Transmission, we signed an exclusive option agreement allowing Enbridge to acquire the TTC Connector pipeline along the Gulf Coast, which connects Tres Palacios Gas Storage to Freeport LNG.

In the Permian, we sanctioned the Bay Runner Twin project, which alongside the initial Bay Runner pipeline, will serve Rio Grande LNG facility along the U.S. Gulf Coast. All said, we are well on track to secure up to CAD 20 billion in new projects in the 2026-2027 timeframe. Now let's dive right into the quarter's presentation. As we outlined here, it is truly an exciting time to be in the energy industry. There is a widening array of opportunities in front of all four core franchises at Enbridge, reflecting possibly the best environment for growth that we've had in recent memory. That is visible in our CAD 50 billion of organic growth capital opportunities through 2030, and the fact that we've already sanctioned approximately CAD 9 billion of capital in 2026. On the Gas Transmission front, we're hearing from customers in all regions of our footprint, including the U.S. Northeast, Midwest, and Southeast. All are looking for additional capacity to support unprecedented power and LNG demand.

In liquids, we're evaluating a suite of optimizations across our systems to enable the wave of growth being discussed in both Canada and the United States. Energy policy is shifting, and with the right implementation by governments, we expect real tailwinds across the continent, enabling project FIDs of critical liquids infrastructure investment. At our utilities, a combination of population growth, power needs, while maintaining affordability, are driving very strong rate-based growth, particularly in the higher-returning U.S. markets we serve. And finally, in our power business, we're continuing to leverage our core partnerships with hyperscalers like Meta to secure long-term, quick-cycle projects. Our secured growth backlog has grown consistently these past two years alongside a continuous improvement in project returns.

We're leveraging our scale, experience, and incumbency to improve build multiples, creating value for our customers and shareholders in ways that differentiate us from peers. Now let's dive into the business units. What is becoming increasingly clear is that the energy industry has re-entered a growth phase somewhat reminiscent of the 2012 to 2015 time period. As producers' confidence improves and the policy environment becomes increasingly supportive of growing production, new infrastructure will be required to support future growth across the continent. In the WCSB, Enbridge is uniquely positioned across both the regional oil sands system and our Mainline and market access network to help meet that infrastructure demand.

Within the oil sands region, our network of 30 gathering lateral and Mainline pipelines serves approximately 50% of all oil sands production in Alberta. We also have some latent capacity on those assets that can be optimized to support new and existing customers, leveraging our significant infrastructure to move product to both Edmonton and Hardisty hubs. On the condensate front, Southern Lights imports some 200,000 barrels per day into Canada, and the Norlite system can distribute well over 200,000 barrels per day of diluent further within Alberta for our WCSB customers and has additional capacity. We expect those systems to play an increasingly important and expanding role as production grows through the next decade. Beyond our regional assets, construction is advancing on Mainline Optimization Phase One and the Southern Illinois Connector as we advance 180,000 barrels per day of incremental capacity.

Notably, these represent the first Canadian liquids U.S. egress expansions to reach FID since 2017. We are also adding reliability and extending the useful life of our super system through our CAD 2 billion Mainline capital investment program that goes right through 2028. PADD 3 continues to be the premier market for incremental Canadian production. We see this in the recent successful recontracting of the majority of volumes on both Spearhead and Flanagan South, extending those commitments into the 2030s and 2040s respectively. Recent alignment between producers and governments continues to improve the outlook for future WCSB production growth. As our customers work with governments to finalize and implement fiscal, regulatory, and emissions frameworks, which in turn will help frame their long-term development plans, we expect MLO2 and our broader opportunity set to evolve to meet industry needs.

In the near term, we're focused on advancing expansions on Flanagan South and Southern Access extensions as the next phase of sequenced growth across our Mainline and market access system. This quarter, we sanctioned the Line 5 relocation project in Wisconsin. This CAD 1 billion investment supports critical energy infrastructure serving the Great Lakes region. Construction is well underway with a quick cycle in-service date expected in early 2027. Today, we are connected to approximately 75% of North America's refining capacity and continue to provide the lowest cost, most reliable market access solutions for our customers. Taken together, our established footprint provides us with the depth of opportunity embedded within our liquids franchise today. Whether production growth requires additional local or long-haul takeaway capacity, diluent transportation, storage, or gathering, Enbridge is uniquely positioned to customize and provide the infrastructure solutions needed to support the next phase of oil sands development.

The same could be said for our natural gas business, which we'll take a look at right now. Gas Transmission continues to benefit from strong fundamentals across LNG exports, utility demand, industrial development, and of course, growing power generation and data center requirements. This involves brownfield projects all across our footprint, including Valley Crossing, Texas Eastern, the Vector Pipeline, and our systems in the U.S. Southeast. In the U.S. Northeast, we're pleased to announce that our open season on Project Beacon significantly exceeded our initial expectations. We're working with utility, power, and data center customers to advance the project to binding commitments while also progressing permitting activities and will share further updates later in the year. We signed an exclusive option to acquire TTC Connector, which expands our Gulf Coast presence, connecting Enbridge's Tres Palacios natural gas storage operation to Freeport LNG.

The project is fully underpinned by long-term take-or-pay contracts with BP. Our intention is to execute that option upon the facility entering service, which is expected around year-end. Alongside our Whistler joint venture partners, we also sanctioned Bay Runner Twin to serve additional liquefaction capacity for the Rio Grande LNG facility. The Blackcomb Pipeline continues to progress well, and we have started commissioning the pipeline as we work towards a full ISD in the second half of the year. In Canada, we began construction on the CAD 4 billion Sunrise expansion of our BC Pipeline system, providing capacity to serve residential, commercial, power generation, and LNG export demand. Now let's move into our utility franchises. Supportive regulatory jurisdictions give us confidence, stable, predictable returns, and growth at the utilities.

Whether it's capital investment riders, revenue decoupling, or performance-based rates, all four of our utility franchises have a mix of supportive attributes that help provide customers with affordable energy, at the same time, allows us to quickly realize a return on capital. As we continue to expand our rate base and serve more customers, timely recovery of capital is critical to supporting continued investment in the system. We believe all four jurisdictions in which we operate provide constructive regulatory mechanisms that support that objective. We have one active rate case, which is Enbridge Gas Ohio, and earlier this month, we received a staff response from the Public Utilities Commission of Ohio. The report was a constructive starting point as we're working towards a settlement for new rates expected to take effect in early 2027. Now I'll move on to the renewables segment.

Our Renewable Power business continues to grow through high-quality projects supported by strong counterparties and long-term contracted cash flows. We are currently constructing over 2 gigawatts of power generation across North America and Europe, including the Sequoia Solar project that is on track to fully enter service by year-end. Through our partnership with Meta, which now spans four projects, we are on track to construct over 1.4 gigawatts of solar and onshore wind power generation and provide 1.6 gigawatt hours of battery storage. We're continuing to advance over 1.5 gigawatts of additional safe harbored opportunities with blue-chip partners. With that, I'll pass it on to Pat to go over our financial performance through the start of the year.