Enbridge Inc. (ENB) Earnings Call Transcript & Summary

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 Grinding, Liquids 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. As per usual, this call is being webcast and I encourage those listening to follow along with the supporting slides. [indiscernible] 1 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. So 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 team 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 4 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 Bayrunner pipeline, will serve Rio Grande's LNG facility along the U.S. Gulf Coast. All said, we are well on track to secure up to $20 billion in new projects in the 2026-'27 time frame. 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 4 core franchises at Enbridge, reflecting possibly the best environment for growth that we've had in recent memory. That is visible in our $50 billion of organic growth capital opportunities through 2030 and the fact that we've already sanctioned approximately $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 base 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 2 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 reentered a growth phase, somewhat reminiscent of the 2012 to '15 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 [indiscernible], 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 import 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 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 1 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 $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 40s, 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 $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 we'll 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. And in Canada, we began construction on the $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 writers, revenue decoupling or performance-based rates, all 4 of our utility franchises have a mix of supportive attributes that help provide customers with affordable energy, and at the same time, allows us to quickly realize the 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. And we believe all 4 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. The report was a constructive starting point as we're working towards a settlement for new rates expected to take effect in early 2027. And 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 4 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 harbor 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.

Thanks, Greg, and good morning, everyone. High utilization across all 4 business units drove another strong quarter despite continued geopolitical tensions and commodity price volatility. Compared to the second quarter of 2025, adjusted EBITDA increased over $130 million. In Liquids, higher spot volumes on the Seaway pipeline and stronger volumes on our Mainline and Line 9, in addition to various optimization initiatives drove an increase in year-over-year EBITDA. This was partially offset by lower tolls on Line 9. In Gas Transmission, a constructive rate case outcome at East Tennessee and a phased step-up from our previously announced rate settlement in Texas Eastern drove higher EBITDA. Gas Distribution benefited from higher base rates following the recent rate cases for Enbridge Gas Utah and North Carolina. These operating results, along with lower maintenance capital, supported the increase in DCF per share. Earnings per share was slightly down versus prior year due to higher depreciation from assets placed into service and increased interest expense on higher debt principal. Based on our continued momentum and outlook, I'm pleased to reaffirm the 2026 guidance established last December. Our resilient business model continues to deliver strong and predictable results across a wide range of market conditions as demonstrated by our performance amid ongoing macroeconomic uncertainty, commodity price volatility and evolving global trade dynamics. Favorable contracting in our Gas Transmission assets and recent strong performance at our Seaway assets provide tailwinds for 2026, while lower market access contributions in LP and higher U.S. interest rates act as headwinds for the full year. Now moving on to our capital allocation priorities, which remain unchanged. We continue to equity self-fund our growth and our balance sheet remains strong. We exited the second quarter of 2026 at 5.1x debt to EBITDA, primarily due to the quarter-end CAD/U.S. spot rate increasing to $1.42 compared to the average for the quarter of $1.38. Adjusting for this FX impact, debt-to-EBITDA would be within our target range for the quarter. Growing our dividend remains central to our strategy. Over the past 5 years, we've returned $38 billion to shareholders and expect to return between $40 billion to $45 billion over the next 5 years. Our $41 billion backlog provides a clear runway for growth through the decade, supported by a disciplined focus on low-risk accretive brownfield investments. With that, I'll hand it back to Greg to conclude the presentation.

Thank you, Pat. And as we step back and look across the business today, I believe the Enbridge investment proposition has never been stronger. At its foundation is stability, delivered through low-risk utility-like business model and our diversified asset base. This strength is reinforced by predictable cash flows, a disciplined balance sheet and a proven capital allocation framework. Consistency remains a defining characteristic of our company, demonstrated by 31 consecutive years of dividend increases and a long history of delivering on our commitments to you. Looking forward, the company's growth is supported by our $41 billion secured capital backlog and an even larger growth opportunity set across Liquids, Natural Gas Transmission, Gas Utilities and Renewable Power. And perhaps most importantly, we maintain significant optionality. Few companies have the ability to allocate capital across 4 complementary energy infrastructure franchises while leveraging the scale customer relationships and market positions that Enbridge has built over decades. Taken together, those advantages position us to capture growing demand for reliable, affordable and sustainable energy while continuing to generate attractive returns for shareholders and ever-changing market conditions. And with that, I'd like to thank you all for listening, and we'll now open the line for your questions.

[Operator Instructions] Your first question comes from the line of Robert Hope with Scotiabank.

Maybe we can dive a little bit into the MLO2. In your prepared remarks, you mentioned that it's evolving into a broader set of opportunities. Can you maybe add some color on kind of what drove this outcome as well as when could we expect to see incremental clarity on the timing as well as the shape of any opportunities there?

Yes. Let me hand this to Colin, but maybe just let's recognize, first and foremost, the real possibility that we really are -- I think what is a generational change for the positive for the WCSB, oil and gas production and enhanced infrastructure. And after a couple of decades, producers, frankly, having their hands tied behind their back by governments. The changes proposed by the Canadian Alberta government to free up production growth are really dramatic. That said, until producers see all those proposed changes and implemented. So they really are sequencing or resin using what they think their pipeline needs are going to need. So it's really about us customizing solutions for them. But Colin, maybe I'll turn it to you deeper into MLO2.

Yes. Yes, happy to. And yes, we are quite excited about the coming policy environment. We've been advocating it for years on behalf of industry and Canadians and frankly, all North Americans. And it should be a huge tailwind to the incumbent super system. We've already plumbed into it, which you're familiar with. However, producers and governments are still in a nonbinding MOU stage, which is fine. But it will take likely some quarters to flush that out to negotiate it to convert it to implement it into law. And therefore, we don't expect producers to start meaningfully FID production growth yet. And the companion point is -- nor do we expect producers to be making binding FID-able commitments to new pipelines until that. Now there's an order of operation, right? Production policy, production pipelines. We've talked about that for many quarters now and that order of operation will be respected it looks like. So our competitive response to that is that we are on MLO2,Rob, to your point specifically, is we're disaggregating and resequencing segments of our MLO2 path and we'll be now focusing on the Chicago South market access segments first. This will effectively move existing egress barrels -- existing agrees, further south to lower PADD II, PADD III refining centers and multiple U.S. Gulf Coast export options. We'll be expanding the downstream sections. This will still require significant capital, but the scope is simpler and will yield better economics for us here initially. Now the downstream section going before the upstream section, if you like, simply, will create a small imbalance in the system, but we expect this to be temporary until the main line portion is optimized or expanded later. But we think this will be manageable for everyone. And so we've got lots of options. We have lots of mainline optimization designs and scopes and numbers as we've talked about. And if there is tightness in 2028 resulting from this slight delay, we'll solve that with either MLO2 or another MLO design and scope for industry?

Yes, I think it's actually we have a better customized fit for the producers because as -- and I would say for investors in many respects, too. And I think you'll see that in the coming quarters. And as Colin says, create some with that resequencing or pivoting some of that tightness in the main line, then we'll be ready to solve that bottleneck issue for our customers as that comes into focus as well.

All right. Appreciate the color. And then maybe just moving a little bit more north from the mainline. You did highlight kind of the regional oil sands franchise, which does have a number of pipes going north and out there. If we do see a renewed production growth out of the oil sands. Can you remind us just how much latent capacity you do have on the oil sands pipeline network as well as kind of what some optimization or expansion opportunities could come?

Yes, sure. I mean this is -- I appreciate the question. I mean a rising tide should lift all boats. And we've got circa $130 billion of enterprise value already pre-plumbed into this. So we do have some latent capacity in the regional area, as you pointed out, although there will be some bottlenecks in certain parts of that network. Consider we have 7 trunk lines that feed for McMurray down to Edmonton and Hardisty. As a reminder, we've got indigenous partners for 11% of that. But -- so there will be some immediate investment opportunities. We're in active conversations with a number of producers on that basis. And expect to take some FIDs on some incremental capital in the near term, but there also is some operating leverage in the system or on to your question on point.

Yes. It's a really good point, right, like and don't forget, obviously, Norlite, Southern Lights, the diluent facilities up there too, that see how this all goes up, but that's going to be an opportunity for us interconnected with that.

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

I want to start with return on capital here. Greg, you mentioned this being the best environment for growth in over a decade. And that's clearly manifesting itself in the opportunity set moving higher. But curious what that's translating to when we start to think about returns. I guess the last data point we got from '25 is projects that year, we're crossing at a ROCE around 11% I guess we continue to hear customers are now finally sort of recognizing the value of infrastructure in the ground more than before. So curious what you're seeing on your end and if we could expect maybe some upward pressure on that return threshold.

Yes. I think it depends on where we are. Obviously, in the Liquids business, we see the best returns on our capital, just given the size of the footprint, if you will, and the ability, as Colin just mentioned, to use some operating leverage there. And then on the gas pipeline side as well. And it's a difference between Canada and United States. But Look, on the entire base, we're trying to move it up if we can add 100 basis points on a return on capital employed. And that's the target, and we're making good progress on that. That's incredibly valuable. And so it's not just revenue, it's also build multiples. Obviously, that feeds into that, given our size, our ability to buy pipe -- our ability to buy compressors. Our ability even on the distribution side to buy meters given the size. So it's not a one thing. It's on all of those fronts. And I think the nature of most of the projects you see us build are brownfield that help that as well. So yes, 100 basis points on the enterprise value obviously creates some real opportunity. Look, that's harder to do with the pure regulated elements of it, like the distribution company, but making sure that we actually earn our regulated rate of return in each of those areas. And I know Michelle and her team have done a nice job of moving that up to make sure you fully get that. That may in investors' minds be, well, of course, you're going to do that, but that actually just doesn't fall out. So all of those pieces and given the size of the base, that 100 basis point move extremely valuable to us.

Got it. It's great to hear. Second question quickly, maybe just on the Project Beacon. As you noted, received significantly more interest than you all expected. And I realize maybe there's more updates to come. But just curious, can you talk about your ability to maybe expand the scope or maybe even potentially sort of develop a second phase of the project to accommodate all that demand?

Matthew is here. So I'll turn that to Matthew.

Yes. Thanks for the question. This is really a great example of how we're seeing, as Greg talked about, gas demand across all of our footprint in Gas Transmission right now for all kinds of requirements. I mean some of that is obviously power and data centers, and some of it is just catch up in terms of being behind and building infrastructure. And I think Beacon and New England is probably the best example of that, where everyone knows we've needed more gas pipeline capacity into there for quite a while. We are right now working on Algonquin enhancement there, which is a $70,000 a day project based on the interest we got for Beacon, which would be another phase, as you alluded to, we would expect that to be multiple times of that size that we're currently working on, actually, in a phase. You talked about different phases. There's a real recognition we found in the response to the open season of the need for that capacity for affordability and reliability to reduce emissions from oil burning, power as well and energy costs generally. We've got studies that suggest, depending on how big this project is, it could save over $1 billion for utility customers a year in New England. So it's very, very compelling. And we're really pleased that our customers and all the stakeholders there recognizing the importance of it. So it's something we're definitely going to pursue commercially here as the need is very strong. Of course, there's a lot of hurdles to pass. And as you all know, permitting is the #1 thing there. So we'll obviously maintain our discipline as we pursue this and ensure that the permitting risk is very manageable. But we see this as a very promising project, one of many across our entire systems here going forward.

Spiro, I think the other -- I think, Matthew outlined it well, but his last point is that -- to your first question as well, us having good regulatory excellence in the way we do these things and making sure we're not taking on [indiscernible] risk and quickly get through regulatory hearings and filings. That also goes to improving our returns too, right? The quicker we can get from contracts to regulatory to actually getting that cash to work is critical. And we're seeing that right across our entire businesses. But this project, that will be very important for us.

Your next question comes from the line of Manav Gupta with UBS.

I wanted to go back a little. And 2 or 3 years ago, you guys were barely present in the Permian gas. Now you're kind of one of those people who is leading the charge, 2 big pipes coming on and then other opportunities which we are seeing this twin for the Bay runner. Can you talk about your Permian gas strategy and what's going in the basin and all the ways Enbridge can benefit from it?

Sure. Go to Matthew. Yes, you're right. Well, first of all, thanks for the compliment. I think the teams successively in Gas Transmission have made a real move there through Whitewater, which I think you're talking about. But I'm sure Matthew want to touch on the LNG and storage strategy there because all of that is very much tied back into the Permian.

Yes. Thanks a lot for the question. It's something that we've looked at strategically and advanced very intentionally in the last few years. Obviously, our position in the white water assets and now the sanctioning of this second phase at Bay runner, which is great. There's a lot more to do there just in those assets in terms of expansion. And it's not just in the main pipelines, but there's also potential storage expansion, for example, in that footprint. And then downstream as well, and that's probably the next big opportunity is just when that gas hits kind of the Corpus or mainly the Houston market. Where does it go from there? And we have the ability to move that gas around with our Texas Eastern footprint and then through the Gulf Coast area, and that gas is going to want to continue to move further east for various purposes, industrial. And as Greg mentioned, LNG. And so we're pursuing a whole bunch of stuff on that front. And then finally, on the storage front. We've talked about our storage expansion. And last quarter, we announced the expansion of Tres Palacios receives a lot of that gas. We've got about almost 50 Bcf a day of expansion across our own wholly owned Gulf Coast storage facilities. So lots of opportunity there, and we recognize I appreciate you raising that.

Manav, the other -- yes, it's a great question. You will not be surprised that this is a replication strategy that Matthew and before him, Cynthia and Allen here, who's running the Power business now have built for a long time. But it's a replication of Colin and his team's strategy as we built up from the water in Ingleside then back in on the oil side for Gray Oak and those pipes and continue to look at those opportunities. So this has worked well. This is how you build super system. This is what a good super system looks like. and we're going to keep doing it both on the oil and gas side. So I think the coming quarters will have some exciting elements to that on both fronts.

Perfect. My quick follow-up here is because so many good things are going on in the company. Sometimes the one part of the portfolio, which doesn't get enough credit, in our opinion, is your renewables portfolio. I don't think there are that many companies out there that have 1.4 gigawatt partnership with Meta. And then I think the tax credit is gives you. So can you talk a little bit more about your renewables portfolio and all the good things that are happening over there?

Yes. I think absolutely. And I think since Enbridge Day just about 14 months, 15 months ago, we've actually FID-ed $3.5 billion, $3.4 billion worth of renewables. But I know, Allen, you got lots of other plans too.

Yes. Manav, thanks for the question. A lot of credit to goes to Matthew, who really built this business off. Right now, we've got, as you can see from the slide, over 1.5 gigs just under construction. And a lot of that is with Meta, as you mentioned, also AT&T, Toyota and others. So real blue-chip customers that we're really getting. And I think you can attribute that to the Enbridge brand, our size and scale at the end of the day. Also on the safe harbor side, we got about another, call it, 1.5 gigs of opportunity there, which gives us a lot of time as I think this tax credit thing gets sorted out. I do believe that -- and I've talked to a lot of others in the industry that have the same opinion that even once you move past the safe harbor opportunities, the safe harbor tax opportunities that there are ways to make these projects economic without the tax credits even in a tariff environment because, frankly, they're needed. In order to meet the electricity demand that we have out there that you're going to need renewables to supplement what's probably going to be mostly natural gas that's really going to end up doing most of the supplying a lot of that demand, but renewables are going to play a big part as well. And that's why we're so excited about this business and why it's a part of the portfolio.

Again, it also speaks to that all of above strategy. So I appreciate your comments on the renewables. But let's not forget, this company Enbridge since, again, Investor Day, we are either constructing or have sanctioned 10.5 gigawatts of power infrastructure. And what I mean by that is you got the renewable piece that we just talked about. But let's not get at the Utility. We're building the T15 line, which supports about 2.5 gigawatts of power in North Carolina. The Sesh project we announced AGT First Rob, Tennessee Ridge line, which will come in at the end of the year. Line 31 in Louisiana Vector, which we own 60% of those projects all told those all account for 10.5 gigawatts largely supporting power. So it's all of the above. People are less interested in what color your electrons on are your molecules. They need it. from an affordability perspective from an industrial growth perspective and I think we're delivering on that with more to come.

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

Just wanted to come back to MLO2. It sounds like the upstream project has been postpone for the time being. And I wonder if you could just dive a little bit deeper as to what has changed in recent months, whether there be a cost or customer demand thing or other elements?

I don't think it's either one of those, but I think about -- as I said, I mean, I think about this as the geopolitics of volatility and the psychology of sanctioning projects, right? So just think of the last 6 months, we've seen WTI go from $63 to $113 back to $69 then to $92. And in the last 30 days, it's gone from below $70 to above $90, back below $80, and now I think I've checked this morning, but a little over $80. So on the street [indiscernible] moves has gone from being open to close to maybe it's open to maybe 20% or 80% open. And then you've seen governments made pretty dramatic moves in terms of their policy stance, et cetera, and then throw in a little Venezuela there. So I think you can see there's a fair bit of a challenging backdrop for producers, refiners, exporters and pipelines to fully commit to large-scale projects. But let's make no mistake that is coming because the needs are there tightest. Look at the refineries. Refineries in North America are running at the high 90s. All this says they need more capacity. They're going to need more pipeline capacity and then of course North American export. It's just until we get through that volatility piece, people are going to be focused on give me customized solutions that I can utilize and I'll deal with the bigger solutions as we go forward. So Colin, you might want to add to that.

Yes. I think what's changed. I think just the pace of policy implementation has taken a little longer. It's all positive. And like we said, we've been advocating for it, but it just does take a little time to get fleshed out to put in a paper and producers are behaving with discipline, which I respect. I think they'll get there. We were just a little too quick off the line here, but we've started those conversations and there's a lot of support for mainline egress.

I think you're going to see more opportunities attached to this and think about the Gulf Coast, too. And the great thing is, what are the 2 best places to be in North America when you've got this environment, it's the Permian and the Western Canadian sedimentary basin, and where is Enbridge oil business? Right there. serving PADD II and PADD III and 75% of the refining capacity in North America. So yes, this -- I don't think it's so much of a change. It's just getting as comments gun to go out for the race and getting to the finish line.

Understood. That makes sense. If I could just finish off with a question on the balance sheet. Pat, I think you mentioned that the debt to EBITDA -- it's a little bit over 5x, but after you adjust for FX, it will be within your target range. If I look at one of your slides in your pack, where the $41 billion of secured capital program, I'm guessing about 40% of that is coming into service in 2027 with CapEx being spent today in the coming quarters. So I wonder if you could just give us a little bit of a trajectory as to how you think that the EBITDA metric will progress through the end of 2027.

Yes. So I think we're pretty comfortable with our leverage levels, as you noted, a 5.1 for the at the end of the quarter. But if you adjust for FX within that $4.5 to $5 million and you're right in that we'll have actually a fair decent number of projects coming into service near the end of this year and then a big chunk of them kind of call it the back half of next year. And so I think we'll stay near the top of that range during that period of time, but we're comfortable that with the levers we've got, whether that be just cash flow we're generating, whether that be we've got some hybrid capacity potential asset sales monetization, things like that, that we should go to manage well within that range. So we're excited to continue to build out this portfolio. The other thing I'd say, you mentioned about that portfolio we've talked a lot about is that it's right down our fairway from a risk-reward perspective and right in our core business, which is fantastic. So we feel really comfortable with the leverage that we've got and the tools we have to manage that as we go.

As those assets come into service in the back half of 2017, presumably on a run rate basis, you're probably in the lower to mid part of that 4.5 to 5x range.

Yes. I mean, I guess that partly will be determined by what other opportunities we secure in that window. If we start securing larger projects over the next little while, there probably won't be a lot of capital but there could be some capital in the back part of '27. So I'm not sure we'll be in the lower part, but it should naturally come down as cash flows come on. But that will be a bit determined by the amount of capital that we see. And the truth is we're seeing a lot of opportunities. So we'll see how those evolve over the next little while, but we're really comfortable that we can maintain that as we go forward.

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

Just wanted to drill in a little bit, if we could. The $20 billion project sanctioning target for '26-'27, already $9 billion in the bank, so a good portion there. But just was wondering specific number there putting out this quarter. I just wondered if you might be able to dive in a little bit more on specifically the types of projects, the areas. Is this largely natgas logistics to service power? Or are there other elements to this $20 billion target we should think about?