Enbridge Inc. ($ENB)

Good morning, and welcome to the Enbridge Inc. First 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, Liquid Pipelines; Matthew Akman, Gas Transmission; Michele Harradence, Gas Distribution and Storage; and Allen Capps, Renewable Power. [Operator Instructions]. Please note, this conference call is being recorded. [Operator Instructions]. 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.

Thanks very much, Marlon, and good morning, everyone. We appreciate you joining us once again today. The first quarter was a strong start to the year, reflecting solid financial performance and continued execution across our businesses. We reaffirmed our '26 guidance and medium-term outlook and continue to operate in line with our 4.5 to 5x debt-to-EBITDA target. From an operational standpoint, utilization was high across all businesses with record Q1 mainline volumes and numerous peak delivery days on our U.S. gas transmission and distribution systems. In April, we completed our seventh expansion of tank storage at Ingleside and have now increased storage capacity to approximately 20 million barrels, and we brought the 120,000 barrel per day Gray Oak expansion into service. On the execution and growth front, we announced open seasons on the Flanagan South and Southern Access extension pipelines, which support mainline optimization Phase 2. We also completed a successful open season on the Spearhead pipeline. During the quarter, we sanctioned a number of exciting projects in gas transmission, including expansions to our Tres Palacios, natural gas storage and our 60% on [ Vector ] pipeline. We also announced an expansion of unregulated natural gas storage at Enbridge Gas Ontario and the 300-megawatt cone power project. We'll dive in a little deeper into these projects in the business update slides. But first, let's take a look at how Enbridge continues to connect supply with rising energy demand. The importance of energy security has become even more evident since the start of the conflict with Iran and Enbridge is well positioned to deliver North America's abundant energy resources, both domestically and globally. LNG exports remain a critical component of energy security. North American liquefaction capacity is expected to require over 30 Bcf per day of natural gas by 2030 and Enbridge is poised to support the global demand through serving 100% of the operating LNG facilities along the U.S. Gulf Coast. We continue to deepen our integration with LNG markets as well via storage expansions of [ Aitken Creek ], Tres Palacios, [ Egan ] and [ Mass Bluff ], new Permian gas egress projects and the advancement of wood fiber LNG. Natural gas demand in North America is expected to increase by 28 Bcf per day by 2030. And we have already begun capturing that growth through sanctioned projects with more new projects to come in the quarters ahead. Tennessee Ridgeline connecting to a power generation facility converting from coal to gas. [ Algonquin ] gas transmission expansion, providing additional capacity to the underserved U.S. Northeast and the vector expansion serving utilities in the Midwest are just a few examples of infrastructure we're currently building. to support local demand. On the liquids side, we are in the midst of advancing 430,000 barrels per day of incremental mainline and express capacity by 2028, adding timely and efficient egress for our [ WCSB ] customers. Our Permian super system remains a cornerstone of the export story and it continues to grow. Projects like the Gray Oak expansion and the new storage tanks at Ingleside support the export facility, which delivers roughly 25% of all U.S. crude exports today. We expect all this to lead to North America moving more than 5 million barrels per day of crude on an ongoing basis to key international markets, including Europe, Asia and Latin America. We all know energy markets have been disrupted since the conflict in Iran and Enbridge will be ready to play its part in providing reliable, secure and affordable energy to customers domestically and overseas. Now let's take a look at how Enbridge's business model is designed to succeed regardless of the macro environment. Despite market volatility since the start of 2026, Enbridge continues to deliver consistent and growing shareholder returns. Our cash flows remain of the highest quality and predictability, diversified across more than 200 asset streams and are largely protected by regulated and long-term take-or-pay contractual frameworks. We have unmatched market access serving more than 75% of North America refineries, moving roughly 20% of all natural gas consumed in North America and directly serving over 7 million gas utility customers. Our diversified platform allows us to provide end-to-end energy solutions across liquids, natural gas transmission, gas distribution and power. Long-standing relationships with customers and our continuously growing partnership with Meta remain a key competitive advantage and underpin our accretive project backlog. We continue to grow through our $40 billion capital backlog which supports visible growth through the end of the decade and we can finance that growth using our $10 billion to $11 billion of equity self-funded annual investment capacity and the strong balance sheet. Now let's dive into the business unit update, starting with Liquids Pipelines. Our Liquids Pipelines business continued to deliver strong performance as we advance efficient egress and storage expansions to meet rising demand. On the mainline, we achieved record first quarter volumes of 3.2 million barrels per day, reflecting strong utilization and the critical role of the system. We're advancing mainline optimization Phase 2 or MLO2, which is expected to add 250,000 barrels per day of incremental WCSB egress capacity by the end of 2028. In support of MLO2, we launched a binding open season for 200,000 barrels per day of incremental FSP capacity and 50,000 barrels per day of incremental capacity on the Southern Access extension pipeline. Early construction activities, including clearing of the [ Riteway ] have now begun on Line 5 relocation project in Wisconsin, supporting the continued flow of vital energy supply in the region. We also completed a successful open season on the Spearhead pipeline, recontracting volumes into the next decade. And in April, we received a number of presidential permits for our liquids pipelines. These permits provide operational flexibility for day-to-day operations as well as future expansions. Along the Gulf Coast, our Ingleside storage expansion has entered service, increasing site capacity to approximately 20 million barrels. And finally, the gray expansion is now complete and the pipe operating capacity is now over 1 million barrels per day, further strengthening our export connectivity. So now let's take a look into our gas transmission business. We continue to benefit from diversified demand drivers creating attractive and highly visible capital opportunities across our gas transmission footprint. In the U.S., we are executing well across our system to support rising demand from power generation, local gas utilities, LNG facilities and new data centers. And we are advancing over $10 billion of near-term growth opportunities with several projects reaching FID this quarter, with more to come this year and next. Those projects include the Tres Palacios expansion, adding 25 Bcf of natural gas storage along the Gulf Coast. The project CapEx is expected to be $400 million and enter service in stages from 2028 to 2030. We have also sanctioned an expansion of the [ Vector ] pipeline for just over $100 million, adding 400 million cubic feet per day of Western capacity to serve growing local utility demand and targeted for in-service in 2028. We continue to evaluate additional expansion opportunities on Vector and recently closed a nonbinding open season in April for another 300 to 500 Mcf per day on that pipeline. This open season was highly successful with customer interest exceeding the offered capacity. Our East Tennessee pipeline reached a settlement in principle on the rate case filed last year, and we expect to file the agreement with the FERC in the second quarter. In Canada, expansions to our gas transmission network are also advancing. Recently, we received all of our required approvals on the $4 billion [ Sunrise ] expansion, with construction expected to begin by early summer. At Wood Fiber LNG, the delivery of the liquefaction module this quarter represents another important execution milestone. Altogether, we have approximately $10 billion of projects under construction in British Columbia to support both domestic energy needs and Canada's growing LNG export market. Let's move over to gas distribution. In Ontario, we sanctioned approximately 8 Bcf of unregulated natural gas storage expansion at the Dawn Hub with an in-service date of 2029. This project strengthens the critical energy platform for Ontario and surrounding regions. At Enbridge Gas Ohio, we filed a new rate case on December 31, 2025, and with rates expected to go into service effective in 2027. And as a reminder, Utah and North Carolina some new rates go into effect on January 1, '26 and November 1, '25, respectively. Our gas distribution and storage business continues to deliver steady regulated growth through disciplined rate base investment. The T15 project is progressing, supporting the [ Roxboro ] power plants conversion from coal to gas and expected to have a phased and in-service from 2027 to 2028. At the [ Maria ] Energy Center, the $600 million U.S. LNG storage facility will strengthen system resiliency by adding 2 Bcf capacity in 2027. Collectively, we expect our utilities to grow rate base by 5% annually through 2029. And while Ontario's growth is slowing, our diversity of assets allows us to redirect capital to the U.S., which very likely will exceed their 8% growth CAGR through 2029. Now I'll move on to the Renewables segment. Our renewable power business continues to progress with disciplined focus on high-quality projects anchored by blue-chip customers and the long-term contracted cash flows. At Sequoia we will have 815 megawatts of generation capacity, about half of which is already in service, and the remaining capacity is expected to come online later this year. We are also happy to announce we are expanding our partnership with Meta once again by sanctioning Cone, an onshore wind project in Texas, which we expect to invest USD 700 million and have the project enter service by the end of 2027. Our partnership with Meta has grown to over 1 gigawatt of power generation between Clearfork, Easter and [ now come ] and we expect the partnership to grow further. Beyond our sanction projects, we have approximately 1.5 gigawatts of additional safe harbor renewable projects, providing meaningful capital optionality. With all that, I'll pass it on to Pat to go over our financial performance through the start of the year.

Thank you, Greg, and thanks to everyone for joining the call today. I'm happy to say we're off to another strong start in 2026. Compared to the first quarter of 2025, adjusted EBITDA remained consistent, DCF per share is up $0.03 and EPS is down about 5%. In liquids, as expected, the absence of a litigation settlement lower contributions from our market access pipelines and lower line 9 tolls resulted in a decrease compared to Q1 2025. In Gas Transmission, favorable contracting on our U.S. gas transmission assets and strong storage results drove the year-over-year increase in EBITDA. Gas Distribution increased year-over-year after the recent rate cases in Utah and North Carolina took effect, as Greg mentioned earlier, and from rate escalators in Ontario. In Renewables, results were lower compared to last year due to the absence of investment tax credits relating to the [ Fox Grill ] solar project, partially offset by strong international wind resources in the first quarter of 2026. A $0.07 decrease in the average CAD to U.S. FX rates year-over-year impacted all 4 business units, resulting in lower EBITDA in 2026. This was, however, partially offset in eliminations and other, due to our realized hedge rate being higher and closer to the actual FX rate we saw in the quarter. Cash distributions in excess of equity earnings was higher in 2026 due to the absence of a legal settlement recognized in Q1 2025 earnings but primarily received in cash in subsequent periods. Higher depreciation from assets placed into service and higher income taxes from the absence of investment tax credits in '26 drove the decrease in EPS. I'm pleased to reaffirm the 2026 guidance that we showed last December. Our resilient business model supports strong and predictable performance across all market cycles and conditions, something that is evident in our results, given the volatile periods we've seen recently. We're on track to achieve the midpoint of our guidance ranges for both EBITDA and DCF per share and are also reaffirming our post-2026 growth outlook, a 5% average annual growth rate for EBITDA, DCF per share and EPS. As a reminder, Q1 and Q4 reflect our strongest quarters as a result of higher utility demand and higher volumes in our liquids pipelines and gas transmission systems during winter months. Moving on to our capital allocation priorities. Our approach remains unchanged in 2026, supported by continued equity self-funding and the stability of our regulated and predictable cash flows. Returning capital through dividends remains core to our value proposition. We returned $38 billion to shareholders over the past 5 years and expect to return $40 billion to $45 billion over the next 5 years. Our $40 billion backlog extends through 2033, providing strong long-term growth visibility, as we prioritize accretive brownfield opportunities. And with that, I'll pass it back to Greg to close out the presentation.

Thanks, Pat. Enbridge remains a first choice investment opportunity with a value proposition designed to deliver superior shareholder returns across all markets, geopolitical and commodity cycles. At the core of this is stability reflected in our low-risk utility-like business model and a fundamentally diverse asset base. Our strength comes from predictable, resilient cash flows that support a strong balance sheet, disciplined capital allocation and ongoing strategic investments. Consistency is a defining feature of our story, highlighted by 31 consecutive years of annual dividend increases as well as 20 years of achieving financial guidance. Looking ahead, we expect approximately 5% annual average growth through the end of the decade, driven by our growing secured capital program and we maintain the ability to deploy capital across our 4 franchises, allowing us to respond quickly to the most compelling opportunities in front of us. As the long-term total return performance on this slide illustrates, our business model has continued to perform through events ranging from financial crisis to global pandemics and geopolitical shocks. Enbridge's scale, diversification and stable business model positions us well to continue delivering durable growth and long-term value to our shareholders, making us that first choice investment opportunity. We are in a world with an amazing growth macro for energy infrastructure, the best growth opportunities I have seen in 10 to 15 years. This could be a real upside for investors. Should we see the EBITDA multiples of that period reemerge as the macro fundamentals seem to suggest they should. With that, I'd like to thank you all for listening in, and we'll now open the line for questions.

[Operator Instructions]. Your first question comes from the line of Aaron MacNeil from TD Cowen.

Last quarter, you had a slide in your deck that highlighted $10 billion to $20 billion of near-term growth opportunities. One of the more interesting items on that slide was export optionality at Ingleside in light of the continued closure of the Strait of Hormuz and the market's renewed focus on energy security and non-Middle East supply. So you noted the new storage in your remarks and announced the acquisition of the Front Hills docs not too long ago. I guess my question is, are you seeing a measurable increase in inbound inquiries for incremental export capacity at Ingleside and would you expect export growth to pull through additional pipeline debottlenecking upstream? Or is the sequencing the other way around?

Aaron, it's Colin and obviously, a timely question. And I think -- well, the short answer is yes, I can elaborate a little further. And we didn't see a lot of that come through in the Q1 period, right in March because of the trade cycle and things, but it showed up strongly in April, May and in June here, and everyone understands the dynamic there. We do expect a lot more business there. I think on a capital-efficient basis, right? So as you mentioned, we purchased the neighboring docs a couple of years ago. We've got permitting headroom there. We just finished a $2.5 million storage expansion at Ingleside. So there should be some operating leverage here. So hopefully, it's capital efficient. But yes, on the dock and -- and on the pipe as well over time, I mean there's an implicit comment there around the outlook for the Permian Basin, which we continue to believe is a winner, and the majors are there and I think you're seeing a lot of discipline at the outset here, a couple of producers adding some rigs. But I think the consensus view would be that the price of oil globally, it probably has a higher floor and we'll likely see rigs added through the fall budget cycle and into '27 as well.

Aaron, it's Greg. I just -- I would just add that everything Colin says being on and exports now kind of pushing 6 million barrels just with the conflict. I think it will be really interesting to see is even when the conflict is solved, how much more reliance, and I think there will be on the U.S. Gulf Coast and Canada for that matter as well. And that should position well for those with the docs closest to Bluewater, which would be us. But let's not lose track of how important it also is for the refining complexes, as people look for more secure product, you've seen refining capacity creep up. Obviously, that's important for inland pipelines as well as exports. And then as Colin said, let's I don't know exactly what the price will be, but if the effect oil was going to be 65% to 70%, I don't think you should be surprised that the new base is 75% to 80%, which is helpful for production, too. So it's actually lining up to be a super favorable environment for oil infrastructure in North America, both domestically and export wise.

Great. You mentioned the 1.5 gigawatts of safe harbor renewables projects in your prepared remarks. The wedge of renewables projects coming into service in 2027 is pretty significant. So I guess like -- do you think you could see another meaningful contribution in 2028? And when would you need to see announcements by in order to sort of lock that in?

Well, I'll let Allen speak to that. But one of the great things you pointed out is just have relatively quick cycle these are even the -- when we announced today, gets into '27, and that gigawatts is important. But Allen, do you want to speak to that?

Sure. Thanks, Aaron. So really have on the backlog, we could probably see some of those actually coming in, in probably '28, '29 time frame. That said these things tend to come in kind of chunky. I think you've seen quite a bit in the last few quarters where we've seen -- where we've had pretty much an announcement every quarter for quite some time. And you'll see probably a few more in the coming 2 to 3 quarters. That may tail off for a little bit, and then you'll start to see more of them come back in as we're taking advantage of those safe harbor opportunities. And a lot of those opportunities that we have, not only are the safe harbor they have the permits, too. A lot of folks are concerned about the federal permits on like and a lot of them have those federal permits as well. So a real opportunity for us. I think you'll continue to see is the demand for renewables is really good right now. And I think that's evidenced by all the projects that we have to come in. So as you continue to see that demand be robust on the renewable side, I think we've taken advantage of it.

Yes, and it's not just renewal, it's power, right? So I think what you're seeing with the meta deals and the stuff that Allen talked about, and we've said this before, but I think it's bearing, I don't know [indiscernible] is talking about the color of electrons. The #1 thing that presents AI from progressing further is in GPU architecture, it's really access to energy, and that's the first time that's happened. So yes, game on for power, but that's why it's nice to have gas infrastructure and renewable infrastructure so we can serve those [indiscernible] clients.

Your next question comes from the line of Rob Hope from Scotiabank.

I have 2 comments -- or 2 questions on the crude oil business. First, how are you thinking about the competitive positioning of MLO 2? But I guess, more importantly, MLO 3 versus some of the competing options, which, I would say, are bubbling up to the surface being [ Prairie Connector ] as well as a larger expansion of the [ Trans Mountain ] system?

Sure, Rob, a few points of color around that. Listen, I think you've followed us for a while, and I realize our mainline path is resilient and advantage, so as defensive and offensive strength. It's demonstrated time and time again. We're growing it. As a reminder, something connector and [ MLL1 ] or in execution and trending well. And we're commercializing MLO2, as we've discussed. MLO2 is well engineered, relatively advanced on scope, capital costs well understood. We're actively engaged with a number of customers. And Yes. In contrast to alternatives, I think a reminder that MLO 2 has -- was always intended to be an inside defense expansion permit light, executable no new pipe per se, which is novel using existing pipelines and then surface quickly, which is important. And another point, which is often lost with modest take-or-pay efficiency requirements right, given that the mainline is generally walk up. So that's trending well. I think we've seen other competitors respond to the quite favorable outlook in the Canadian Basin which is not surprising. I won't comment exactly on each of the competitors. I think they're well covered. But if we do see shippers term contract on any of these. I think I would view it as a positive sign and a vote of confidence in the basin and the outlook, which should float all oil infra. So that's a very -- as Greg was saying, I think it's a very positive macro and certainly, the mainline expansion program will get its share. You mentioned MLO 3. We're developing that still and with 7 pipelines in the right of way. And now with amended U.S. presidential permits, modernized and harmonized with respect to product type and flexibility around capacity limits. We've got a plethora of flexibility here to tailor and design whatever is needed at the right time. And we've got a number of versions, I would say, of MLO 3, if you want to think about it that way. So that's how we see it play out here. It's -- I assume back out and just observed that it's a very favorable macro. And we're all trying to serve customers who are monetizing a world-class resource.

Appreciate that color. Maybe then moving over to [ Line 5 ]. It looks like there's been a number of updates there. So can you maybe add a little bit more color on some of the legal challenges on the tunnel as well as the construction in Wisconsin.

Thanks, Rob. Yes, I'll try to abbreviate my answer this question tends to get long, but maybe we haven't talked about Line in a while, kind of a good thing. But I'll give you a quick update. As you know, big picture line 5 seems to be pretty critical. Energy inroad in the U.S. Great Lake region, contributing to this all-important energy security. The line is closely scrutinized, including by FIMSA U.S. pipeline safety regulator and that continues to operate safely for salable future. I think courts have increasingly recognized this U.S. federal jurisdiction, recent court findings. But as a reminder, nonetheless, we are permitting and pursuing relocating 2 sections of Line 5 at the request of local governments and tribes and industries expense in Wisconsin. We're advancing a 41-mile relocation to discontinue operation across the Bad River reservation. And in Michigan, we're moving the pipe from the lake bed to the tunnel. Time line-wise, where we expect to complete these in late 26 and the early 30s, respectively. In Wisconsin, we have state and federal permits -- we have easements on the 41-mile relocation route and have been completing preconstruction activities, think tree clearing and prepping the right away. It's May now. So spring road bands have recently ended, and we'll advance construction here through the summer and late fall. With the permits now contested and well known and in hand, we're now better able to accurately estimate the Wisconsin project cost which is now approaching USD 900 million. Now this is more than you typically expect for this 41-mile distance, but I consider that about 1/3 of that million value is related to 6 years of considerable permitting legal and tribal engagement and has been incurred. So we've got about $600 million left. And you should expect to see this project added to our secured project listing in the second quarter, Rob. Quickly on Michigan. We don't have a refreshed estimate CapEx-wise for the tunnel at this time as we continue to await state and federal permits and conditions. And maybe the last point I'll just make here is a reminder that the investments in Line 5 Infra Wisconsin, Michigan, regular stuff are all covered as eligible rate base within our commercial arrangements and will be borne by our shippers through tools over time. So I don't know if that catches you up, hopefully, Rob.

Your next question comes from the line of Spiro Dounis from Citi.

I want to start with opportunistic gains here and the results for the first quarter. Strong start to the year, but you're reaffirming the guidance. So just curious if you could just walk us through how much of that 1Q performance exceeded internal expectations and understanding that your assets are built for stability. It did seem like you were able to benefit from some of the volatility and weather out there. So to the extent that's accurate, how do you think about your ability to keep capturing some of that upside and volatility for the rest of the year?

Yes. I'll let Pat go at this. But I would say a reminder, and we rarely changed our number in the first quarter, no matter how good it may be largely because we've got a strong first quarter and a strong fourth quarter. So -- and as you point out, with highly contracted, very small commodity exposure. That's why we've structured the company that way. But Pat, do you want to speak a little bit to?

Yes. I mean there's probably 2 or 3 areas that we benefit from weather, as you're noting, on the edges of the business model. First being in Ontario, where we've got weather impacts. It was about net year-over-year, only about $10 million because we had a colder Q1 last year as well. So there about $10 million there. [indiscernible], the storage [indiscernible] that we're currently expanding has the ability to take advantage, and there's probably $0.01 or so of overperformance there. And then a little bit on things like interruptible service on our gas pipes. So all in all, you can think of it as being a couple of pennies in the quarter. And that just speaks to the business model that we have. and the fact that we have like no commodity exposure. So I think more so than the weather, Colin's talked about the implication of a tailwind for things like Ingleside and Gray Oak will monitor that in the second quarter and see how that goes and how long that lasts for and adjust as we go. But right now, we're still pretty comfortable with the range that we've given you.

That's great. Maybe switching gears to the Permian, Greg, you sound understandably pretty constructive on the basin. I think your reference was to the crude side, but of course, a lot of gas coming out of the ground with it. You're obviously pretty active there in the Permian gas egress side. You think over 10 Bcf a day of new pipelines coming would be enough to satisfy it. But already getting a lot of indication that, that might not be enough. So just curious how you're thinking about the need for more egress and Enbridge's potential involvement in more expansions there?

Yes. And let's not forget our position in white water. And I think as you may see some information on that. I would agree with your bullishness in that regard. We are, too. We seem to fill up every pipeline industry-wide. The minute they open up the valves in the Permian. So I think there's more opportunities there and we're pursuing those. And Matthew, maybe you want to speak to some of that.

A couple of areas of opportunities there. And as Greg mentioned and a reminder, our interest in the white water assets, which is sort of our direct play on the pipes there. Couple of pipelines coming into service this year, there still we have [ Bay runner ] coming into service later this year in [ Blackcomb ] and then a whole bunch of other stuff going forward. We have a position, as you know, in [indiscernible]. I think the other piece, though, for us that we see, and you saw this in our announcements is storage. And with all the activity coming out of the Permian, a lot of that gas is obviously going to be going offshore. And a lot of additional storage required just for additional demand and some of that for the LNG crowd. So we've got great exposure to that, expanding all of our storage assets in the Gulf. As you know, now we have almost 50 Bcf of expansion underway down there. So that's another way that we can profitably with low capital, high returns play that theme.

The other nice thing about the storage is we always talk about our gas business growing at being able to build at 6 to 8x. But that project we talked with you and announced today is actually a little bit below that. So when you can get into the 5s, when you're building brownfield storage and given some of the demands Matthew spoke to, those are super attractive for us.

Our next question comes from the line of Maurice Choy from RBC Capital Markets.

To pick up on one of the comments you made, Greg, in your prepared remarks. You mentioned that this is the best growth -- set of growth opportunities you've seen in the last 10 to 15 years. Can you elaborate a little bit more on that, but also speak to how the returns compare today versus in the past? And what kind of risks that industry players like Enbridge are experiencing today versus the past?

Yes, absolutely. So I'm thinking about that period 2012, '16 period, which was a super positive element, and you saw dramatically higher EBITDA multiples. And where it was going is, you see the increased need for energy, energy security, whether it's global security issues or technology, AI and power growth, which you're well aware of, is multiple of what we saw. I've seen that opportunity from an investment perspective fully be realized by the market below, say, look, you got the tech companies, you got the Caterpillars of the world, but it's not being fully realized, I don't think by investors yet on the midstream side. And you're seeing very solid returns. So they just talk to things like storage, our LNG projects and renewals. You're seeing low mid-teen type returns for us. They are super attractive. And then even on the utility side, where you don't see the same type of returns, just really quite phenomenal growth in rate base, which I just think a couple of years ago, nobody saw. So it's not just and we've been speaking a lot about the oil business. So it's not just one business. It's all of these businesses playing off the theme of everything from tech which drives power, LNG, which is about security oil, which is the refining complex is an industrial side as well as on the expert side, all the pieces that Enbridge have seem to have a really great macro backdrop. So where I was going is, it seems to me that investors haven't yet realized how beneficial and long run that will be. I mean, we're talking about through 2030 very comfortably. In terms if the growth folks see, which would be longer than what we saw in that 2012 to '16 period. So that's where I was going with that. And I think it soon will be recognized.

That's great. And maybe my one follow-up to that is as you looking backwards now as you look forward beyond this 2030 horizon, as you think about how customer demand requests are changing, are your 4 core franchises sufficient? Or are there incremental value chain additions that you're thinking is appropriate?

Yes, it's a good question. We're always looking at that, either whether it's adjacencies or actually going further back. So again, you look at the super system that Colin and his team have built back into the Permian, obviously, and then on the export side. Same on the gas side that we've done in that neck of the woods. Obviously, our extension on the distribution side and the real element I see is there's no longer the discussion of, again, what color your molecule is electron is it's how quickly can you get me electrons and molecules or barrels. And I think if you look at our project list, we're very focused on that, the quick cycle stuff at the distribution company. Actually, quite quick cycle relative to some other forms of power on the renewable side of things, which is super attractive. And again, then the footprint we see on the gas distributions on the gas transmission side and the liquid side allows us to get there quicker than most people. And so I think the greenfield risk that we saw in prior periods is less relevant to Enbridge today given our footprint that's already there. So that's a really game on for growth from an Enbridge perspective. So I appreciate the question. I like us talking about more growth as opposed to less growth and the removal from terminal value as -- and more talking about, are we really valuing these companies given what's happening above and other parts of the economy that should be there. So as you can tell, we're pretty excited about it, and we'll continue to bring projects forward. I know, Matthew, in the next couple of quarters. And it seems like every business unit, we're able to bring on some stuff each quarter to build that backlog and that it builds EBITDA, which builds capacity, which allows us to continue to use both the internally generated equity and the balance sheet to grow.

Your next question comes from the line of Jeremy Tonet from JPMorgan.

I see there's more expansions on the gas storage side here. And just wanted to get a feeling, I guess, for how big the opportunity set is there? We haven't necessarily had a lot of storage development in recent years, and the gas market has grown. Just wanted to see your thoughts on that. And then at the same time, I guess, as an extension, further interest in LNG assets.

Sure. Matthew?

Jeremy, it's Matthew. Yes, we're very excited about our gas storage assets and our expansion program. And just looking at the fundamentals over the last 10 years, just the ratio of storage to production and demand in the U.S. has been cut in half. And actually, that kind of understates the gap between supply and demand because things are getting a lot more peaky, which requires more storage. So we need to catch up on that and the value of storage is on the rise. So as we've announced now with this new Tres Palacios expansion, we've got almost 50 Bcf under construction in the Gulf Coast coming on over the next, call it, 5 years or so. And then also, just as a reminder, up in Canada, we've got 40 Bcf under construction, making Creek. So that is a great pipeline of growth for us. In addition to that, just capital expansion, we do see, as we roll contracts higher storage rates. And so when you combine that just given the fundamental trends I was talking about with the expansion, we're definitely seeing double-digit type growth on those. We've got this great program in front of us, over USD 1 billion of expansion in storage now, if you add it all up, which is great. We'll build that out. There's probably a little bit more we could do around the margins on that. But those are probably the big ones for now. And we like the organic type growth. Others have been we noticed acquiring stuff. We think our returns -- I mean, building stuff at book value is definitely a huge advantage for us relative to those going out and paying multiples of that in the market. So like our position, great pipeline, and we're very excited about this program.

Jeremy, you also mentioned the LNG opportunities. So I -- yes, we're open to that. We like our model, though, of doing it in such a way that is lower risk and more toll based, if you will. But we see those opportunities, and we'll look at that. I think that's some of the adjacencies. But we don't want to take on a bunch of commodity exposure. That's not our style from that perspective. But as Matthew says, even if we don't find those, the -- given our position we currently serve 100% of the Gulf Coast LNG, obviously, involved with that in BC and billions of dollars being spent there, both on our on behalf of our customers on our pipelines and storage, and so yes, we'll look at those opportunities as well. That sure doesn't look like it's moving away. And that's another example of some of the difficulties in the Middle East. Meaning North America, North America, whether it's the Gulf Coast or it's the West Coast of Canada is a choice pace for consumers to be able to get a hold of LNG. With that taking on the risks that I think become much more illustrated when we're there. So yes, we'll look at those 2.

Got it. That's helpful. And then I just want to shift gears a little bit here. And as far as the power markets. And as far as, I guess, with ISOs and regulation there, we've seen, I guess, some proposed changes and it seems like changes overall. I'm just wondering, if that has impacted, I guess, the nature of your conversations with new gas fire generation or just any thoughts you could share there and where you see the greatest near-term opportunity as you talk about this $10 billion of near-term capital opportunities?

Jeremy, it's Matthew again. Yes. So I think you're on to an important point. I mean there's 2 kind of categories or maybe 3 of things going on here. One is -- and this is really kind of a very current and present thing, which is just regulated utilities that have embedded power generation for utility load with pent-up demand, and we're seeing a lot of that across our entire system for power. Then there's the data center stuff, which is playing out. We have great conversations there on the power side for potential extensions. And I know Michele has a lot of that in her business, too. And I think maybe the thing that's more directly on point to what you're talking about is, can we start signing up some of these merchant power plants based on what's in the past been kind of perverse disincentives, frankly, for them to sign up for long-haul gas pipeline capacity and whether that could change based on some rules. I think there's some good ideas floating around on that piece. It's early days, but certainly, there's going to be more potential for that. And a lot of these merchant guys are going to end up direct drive into data centers. And so as they sign up for longer-term contracts on the offtake, we think there's great potential for them to then go upstream on the gas pipeline side, and we're having those conversations. So I think you're on to an important theme that's definitely going to be driving growth across our business.

Yes, it seems like a multiyear capacity markets could shake things up there.

Your next question comes from the line of Robert Catellier from CIBC.

I wondered if you could elaborate on the comments in the presentation about favorable contracting in gas transmission. Does this relate to rates, term or something else entirely? And which end markets are really driving this? I'm taking in terms of LNG, power, et cetera, and which geographies are most important to that trend.

On the contracting side, I'm not exactly sure which part you're referring to. But look, I mean, when you can look at on the storage side, to start with, right, what used to always be short-term contracts we're seeing, and I think we've talked about this before, have to cast capacity at [indiscernible]. For example, is 10 years, very long-term contracts similar to that for the new Tres Palacios [ '25 Bs ] we talked about today, which I think just speaks to -- nobody wants to be caught out without actually having access to the product. So I think it's just a general comment, Rob, with respect to whether it's storage, whether it's pipelines and also our risk appetite, too. We're not going to build pipelines with 5-year contracts, and I get a little shaky at 10-year contracts to be quite honest as well, storage is different. It's always been shorter. And you see the same kind of thing happening in Colin's business as well as we've extended some of the contracts in the market-facing pipes out into 2030s which is not something that I think you could have done a few years ago. So I think it's less about regulatory, more about on the customer side, not wanting to be caught short in this opportunistically rich environment. And obviously, the Enbridge traditional perspective on how much risk we're willing to take on.

Okay. Just for a point of clarification, I was referring to the gas transmission comment on Page 11. But I'll move on to my other question, which has to do with your rate case strategy, particularly in Ohio, so obviously, you filed for a rate case there. And I wonder how you can describe how your regulatory strategy in Ohio has evolved since that last rate case outcome.

Sure, Robert. It's Michele here. And yes, that last rate case was filed late in 2023 by [ Dominion ] and really, what we're doing here is the fact is that we followed the new rate case in December and the fact is there have been some material changes that just simply needed to be reflected since things were in place back in late 2023 and based on the timing, we -- what we're doing is we're seeking to recover our revenues that are sufficient, of course, to pay for our current operating expenses. Importantly, to service our debt, that's one of the biggest things that has shifted is the interest rates that were applicable back in '23 versus now. And then it's any investments in deferrals from the 2 big rider programs that you'd be familiar with. We have in Ohio, the CEP or the capital expenditure program and the pipeline integrity program. So those will get wrapped into the end of June. They're already being recovered on because of the short-cycle nature of them and the monthly riders, but we sweep all that in. So it's in the discovery stage now with the staff report is expected in July, and we expect to enter into meaningful settlement negotiations than with the rates going into place in the first quarter of 2027, but we are really working hard to keep this one tight as simply an update on a lot of the numbers that have changed materially that we had to update and ensure that we're recovering on.

Rob, I'm sorry, I was not following what you were looking to. I see what you were talking about. That's vis-a-vis the tailwinds that we see for the rest of the year. So we're seeing settlements on things like East Tennessee that are favorable. As you know, we've seen the same on Texas Eastern in the past. So that's what we were referring to that weren't there at the start of the year. And I mentioned that in my spoken comments, how that's being filed with the FERC.

Your next question comes from the line of Ben Pham from BMO Capital Markets.

You've reaffirmed the 5% growth rate beyond 2026. And I'm wondering, when do you plan to update the market on guidance, specifically beyond '26. I'm also curious, what do you think is the right duration time frame for guidance for North American pipeline company?

Yes. Well, just for clarity, what we said was 5% growth, '26 plus. So through '26, through the end of the decade. We feel very confident with that. So I think when we put that out was March of -- 14 months March of 2025. And we remain confident in that. I'm glad to hear the -- the Street looking to move up those numbers to that 5% type growth rate. We haven't looked beyond -- we look beyond 2030. We haven't set out any numbers beyond 2030. But I expect either in the fall or early spring, we'll end up having another Investor Day and update you at that time. Just as a reminder, and I think sometimes it gets lost. Just since that Investor Day, which again was about 14 months ago, we have added $17 billion to our sanctioned backlog. So if we continue to see that type of stuff and all that is growth through now through 2030 and even a bit into 2031 and 32, if you look at some of the activity. So yes, it's not just for '26, it's for '26-plus right through 2030. In this environment, given your guidance out to 3 years, I think it would be pretty good. But actually giving you something right out through the end of the decade, I would think is very helpful to investors as well as analysts to come up with their views on the company.

Okay. Got it. I always thought it was more post-2026 guidance, but I was a bit confused on the endpoint of that. So that's all the way through 2030 then. And then the $50 billion of unsanctioned opportunity, I know you mentioned very similar numbers in the past on that. And you've sort of the $10 billion to $20 billion last quarter, next 2 years, could you bridge that for us? I'm assuming that, that's obviously included that $50 billion, but is there a mix of some early-stage projects in there as well?

Yes. And we're always adding to [indiscernible], right? So you're right. I mean, you make a good point. In March of '25, it was about $50 billion. We've sanctioned '17, which just tells you how the hopper in that time has easily filled in there, right? And everything from higher rate base growth on most of our businesses to power opportunities that backlog just gets bigger. And I think, again, as attitudes change around energy security and the power of North America for exports, I'll be surprised actually if that opportunity set doesn't even get bigger. So that's where we're drawing at those sanctioned projects from, but it's filling up at least at the same rate by which were sanctioning projects.

Yes. So maybe just to add to that, like $50 billion is the environment that we're in, the opportunities that we have, as Greg said, $50 billion a year ago, it's still $50 billion even though we've secured a bunch of projects. The $10 billion to $20 billion that we talked about kind of the 24 months, I guess, now 22 months, is really what we plan to FID in that period of time to give you a sense of what you should see on a ratable basis from us from an FID perspective, pulling from that $50 billion opportunity set, if that helps to clarify it.

Your next question comes from the line of Patrick Kenny from National Bank.

Just back on the robust outlook for crude exports out of the Gulf Coast. I guess the longer this Middle East conflict lasts and the longer prices at the pump remain elevated in the U.S., the higher the risk of political intervention related to banning or at least capping export levels. So I was just wondering if you might be taking any steps over the near term to protect your franchise operationally? And also if you could remind us of any commercial protections you might have financially within your contracts at Ingleside.

Yes. I'll let Colin speak to that. I would be very clear that at least twice the Secretary of Energy has said that is not something they're looking at, even as we've seen this run up. So I think that's a really important perspective. And then, of course, we've just successfully contracted on Gray Oak, which is an important protection as well, obviously. But Colin, do you want to speak further to that?

I don't know if there's a lot to add. I agree with everything you're saying. We've -- we're in regular contact with the administration. We're well attuned to the alternatives in play here and support and subscribe to the notion that constraining global exports will hurt not help the situation here as it's a global commodity. So as Greg mentioned, we've got very robust contract provisions around the export facilities.

It's a really interesting dynamic, right? Because the United States government I think has not been shy about projecting power off the Gulf Coast by being to export crude. And remember, much of that Permian crude is what gets exported because the U.S. refiners like the heavier products, which is what we provide, out of Canada, so importantly. And we're even starting to see some more exports of Canadian crude modestly off the Gulf Coast as well. So there's no doubt there's a consumer voter element here, but I just don't see this administration changing their view of being able to use energy, frankly, as a geopolitical tool despite the current conflict over and above military power.

Okay. That's great. I appreciate your comments on that. And then just on the balance sheet, I guess, debt to EBITDA, sitting at the top end of your target range. Just wanted to confirm if you're still expecting to remain within the range through 2026? Or is there no potential given the sanctioning of more growth CapEx that you've outlined to see leverage [indiscernible] over 5x temporarily? And if so, the timing of when you might expect to come back down to say closer to the midpoint of that 4.5 to 5x range?

Yes. Thanks, Pat. I think it's fair to say that we're still comfortable with the 4.5% to 5% range, but at the top this quarter for a couple of reasons. One is FX plays a little bit of a role in that and that it was [ $1.37 ] on a quarter, but then popped right at the end of the quarter there to be [ $140 million ]. So that moved it a little bit. We also expect it to be a little bit higher at the front end this year given that the vast majority of our projects coming into the back end of the year, the big projects, things like Tennessee Ridgeline, T-North Aspen some of the Sequoia Easter type projects. So I think we're still pretty comfortable with it. For when is it going to come down closer to the midpoint. I think I said a couple of quarters ago that we'll probably be in that upper half for the next couple of years just because we've got this large build in front of us. But of course, the capital we're putting in near the end of '21 here and then a pretty large capital coming in '28, that should really help to bring those ratios back to kind of that middle point of it. So we're still feeling very comfortable and the low-risk business model helps with that, all this growth we've been talking about lines up perfectly with that risk return that we have discipline that we've had as an organization. I like the fact that when we're talking about these capital opportunities, they are long-term contracts and gas transmission assets, long-term contracted liquids pipeline. So not having to step outside of our risk/reward view to continue to grow the organization. So feeling very comfortable about where we are from a financing perspective.

And your final question comes from the line of Manav Gupta from UBS.

I have 2 quick questions. First, can you talk about your growing partnership with Meta? Not many midstream companies that are out there with 1 gigawatts of capacity with Meta. So if you could talk a little bit about that? And second, there were some news articles floating yesterday that [indiscernible] is looking to make easier for projects to proceed in Canada. [ Sonova and CNQ ] have already talked about some of these things on their earnings calls. And basically, what they're saying is you can't hold back Canada in the current environment where the world needs crude and oil. And I was wondering if you have any views on any policy changes that could expedite projects in Canada to speed up the development of oil and gas projects over there?

Yes. Well, on the Google on the Meta piece, I think you'll continue to see that relationship grow. Allen, do you want to speak to that? And then I'll come back on the oil front.

Yes. So thanks for the question, Manav. So on Meta, they've come out and said that they want to be net 0 by 2030 and that 100% operations powered by renewables. So really opens the door for folks with long-term relationships with them to do more with them. And so we do expect to see more with Meta. We really are excited about the relationship. And I'll just say that I think we've developed a really good trust relationship with them, and that's the foundation for future opportunities. So we feel really good there and hopefully, we'll see more opportunities going forward.

Yes. And on the project front, look, I think there's been a lot of positive words in Canada and some concrete actions that have been taken. We got a very quick turnaround from the federal government on the final approval for [ Sunrise ], which is critical to LNG. Obviously, there's the major project office there and projects in the national interest. So I think that's great news. And I'm hoping and expecting and taking the government that's we're seeing it to find ways to shrink down some of those time frames even for projects like [ Sunrise ] but that being said, I'm perfectly aligned with our customers on the other issues that they raised. Yes, Canada is an obligation, I think, to serve the world and has the ability to serve the world if it wants to be an energy superpower, and I think they're focused on the right piece. We often focus on the pipeline. But what has to come first is the production, the permitting and then you get the pipelines. So I think they're pointing out and making sure that all the policymakers are aware that without production growth, the infrastructure is kind of irrelevant.

And that concludes our question-and-answer session. I will now turn the call back over to Marlon Samuel for closing remarks.

Great. Thank you, and we appreciate your ongoing interest in Enbridge. As always, our Investor Relations team is available following the call for any additional questions that you may have. Once again, thank you, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.