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Highlights

Midstream operator holds 10.5% stake in Annova LNG

Company seeks projects that boost pipeline interests

Houston — Canada's Enbridge wants to expand its North American natural gas infrastructure footprint and would be willing to make a small investment in another LNG export project if an opportunity presented itself to further its pipeline interests, CEO Al Monaco said Tuesday.

During an investor presentation in New York that was webcast, the midstream operator outlined a strategy heading into 2020 that largely focuses on its core strengths in liquids pipelines, gas transmission and gas distribution and storage.

While directly investing in new liquefaction is not high on that list, Enbridge sees it as a potential means to an end, as it seeks to boost gas volumes on its existing pipelines and build new ones to serve growing export markets, including from the US Gulf Coast. It holds a 10.5% stake in the proposed Annova LNG export project in Brownsville, Texas.

"If there is an opportunity to make a small investment that would help us win a pipeline project and there was an LNG model that fit with our own model, I would suppose that would be an opportunity," Monaco said.

He described the possibility of another similar investment as "low probability" but possible under the right conditions. Annova LNG is being developed to receive natural gas supply from a pipeline lateral that would connect to Enbridge's Valley Crossing Pipeline system.

Enbridge's goal in recent years has been to run a pure-play utility pipeline business that focuses on generating predictable long-term fixed fees. The company has sold billions of dollars in non-core assets to overhaul its portfolio around that mission, and it has retooled its corporate structure following the 2017 acquisition of US midstream operator Spectra Energy.

Challenges winning over regulators and landowners have hampered some of the efforts to expand its pipeline network, especially in New England, where opposition from environmental groups to further fossil-fuel project development has been strong. The Enbridge-backed Access Northeast project was shelved amid fierce opposition and legal and regulatory setbacks.

During the investor conference, Monaco acknowledged the challenges.

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"As midstreamers, we are often the point of attack," he said. "So, yes, it is tougher to get things done. It is why we have to develop and have developed a unique execution skill set that is built for this situation."

Both with its existing infrastructure and expansion projects, Monaco said Enbridge stands ready to help meet increased global demand for natural gas in the years ahead.

"These customers and markets aren't going anywhere, so our pipes are going to be around for a very long time," he said. "It is clear to me we are going to need all sources of supply. Natural gas will play the biggest role. In fact, the US is the poster child for this."

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Zac Aiuppa, newsdesk@spglobal.com