Enbridge’s (ENB.TO)(ENB) top executives say Canadian crude will continue to see strong demand from U.S. Gulf Coast refineries, even if additional heavy oil imports from Venezuela reach American shores.
“The U.S. Gulf Coast is the world’s best refining market, and Canadian crude is a meat and potato part of the diet there,” Colin Gruending, Enbridge’s president for liquids pipelines, told stock market analysts on Friday.
“The Venezuela piece is a supplement to Canadian [heavy grades of oil], not a replacement,” chief executive officer Greg Ebel added.
The U.S. Treasury Department eased sanctions on Venezuela’s energy sector on Friday, issuing two general licenses that allow global energy companies to resume oil and gas operations. Venezuela’s massive oil industry has been in the hands of the U.S. government since the military captured president Nicolás Maduro last month.
Shares of Canada’s largest oil producers faced pressure in January, as investors weighed the prospect of America reducing its reliance on oil imports from Canada.
Calgary-based Enbridge is uniquely at the intersection of Canada’s oil industry, and imports of Venezuelan crude in the U.S. Gulf. The company’s Mainline network is Canada’s largest oil pipeline system, connecting Western Canada with the U.S. Midwest, Eastern Canada, and the U.S. Gulf Coast.
Enbridge is also the largest conduit for oil imports to the U.S. through its Gulf Coast terminals.
“On Venezuela, it’s early days, and certainly the longer-term outcome there is uncertain,” Gruending said. “We’ll see how quickly Venezuela grows its production. Then, we’ll also need to evaluate what portion of that increased supply growth comes to the west Gulf Coast.”
According to the U.S. Energy Information Agency, Canada exports 4.5 million barrels of oil per day to the U.S., representing about 90 per cent of Canada’s total oil exports. In 2024, the Canadian Energy Regulator says about 16 per cent of Canada’s total crude oil exports were destined for the U.S. Gulf Coast.
Enbridge reported financial results before Friday’s opening bell. The company booked a $1.95 billion profit for the three months ended Dec. 31, up from $493 million in the same quarter last year.
It also increased its quarterly dividend by three per cent to $0.97 per share as of March 1.
Ebel says winter weather helped pave the way for several all-time peak demand days for Enbridge’s natural gas transmission, distribution, and storage business. The company operates North America’s largest natural gas utility by volume.
Toronto-listed shares closed 3.79 per cent higher on Friday at $73.30. The stock has gained nearly 14 per cent over the past 12 months.
Enbridge says its secured backlog of projects through 2033 is worth $39 billion, spanning natural gas, oil, and renewable energy. On Friday, Ebel said the company expects to reach a final investment decision on $10 billion to $20 billion worth of additional projects in the next two years.
“In renewable power, we’ve added $3 billion of capital to support technology and data centre operations for companies like Meta,” he said. “Customers are looking for electrons.”
Enbridge’s top executive also expressed optimism about Canada’s federal government, and its apparent shift in posture towards the oil and gas sector under Prime Minister Mark Carney. However, he says the private sector remains reluctant to back new infrastructure projects under Ottawa’s current policies.
Ebel says Enbridge will continue advance plans to build out its massive Mainline system.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.