Third-quarter 2026 earnings call, November 6, 2026: 2026 guidance reaffirmed at the midpoint, leverage temporarily at 5.1x
Enbridge used its third-quarter call to formalize a leadership handover that was announced earlier in the quarter. CEO Greg Ebel will retire at year-end, and Michele Harradence, currently head of Gas Distribution and Storage, takes over on January 1. Ebel described it as his last earnings call and said the succession was the product of a multiyear effort with the Board. Harradence signaled continuity rather than a change of course. She described the company as built on "disciplined capital allocators, exceptional project developers, and top-tier operators," and pointed to 31 consecutive years of dividend increases. She gave no hint of a portfolio reshuffle. Her stated priorities are operating the existing businesses well, being the partner of choice for "all of the above, but more of the above" energy needs, and converting those advantages into long-term returns. Ebel flagged an Investor Day under her leadership, where the longer-term capital program will be laid out.
Capital Allocation: Three Tuck-Ins, $3 Billion of Equity, and a Temporary Leverage Overshoot
The more substantive news is the pace of acquisitions. Enbridge announced the purchase of Tallgrass's crude oil business, which includes the Pony Express Pipeline and the Powder River Gateway system. It also acquired Salt Creek Midstream's crude gathering assets in the Delaware Basin and agreed to buy the gas assets of Laramie Energy to supply Enbridge Gas Utah. Management cited more than $3 billion invested in liquids expansion this quarter alone. To support the deals, the company raised $3 billion of common equity.
The balance sheet is stretched for now. Debt-to-EBITDA ended the quarter at 5.1x, above the 4.5x to 5x target range. CFO Pat Murray attributed the overshoot to quarter-end currency moves, with the Canadian dollar spiking to $1.42 per U.S. dollar, and said leverage would have stayed in range on an FX-adjusted basis. He expects a similar position next quarter as the acquisitions close, but said that on a full-year run-rate EBITDA basis for the acquired assets, leverage should remain "well within" the target. Murray's comments on the Tallgrass economics were limited, but an analyst cited an initial multiple of 10x to 11x EBITDA, and management did not dispute it.
Management also took care to say this is not a shift in strategy. Murray said that "the vast majority of our growth is going to come from our organic program" and that the equity was raised to keep that program funded. Ebel set the conditions for any deal: accretive from the start, additive to the strategic footprint, and able to be carried within the 4.5x to 5x leverage range. Capital recycling also helps. The previously announced $2.7 billion Westcoast partnership with KKR and Apollo closed this quarter, providing capacity beyond the base annual investment of $10 billion to $11 billion. The company expects to return $40 billion to $45 billion in dividends over the next five years, after $39 billion in the past five.
Liquids: Permian Gathering Completes the Wellhead-to-Water Chain, Tallgrass Adds Light Oil
Colin Gruending, head of Liquids Pipelines, described the Permian build-out as a deliberate "crawl, walk, run" progression: first the export port, then the Gray Oak pipeline, and now the gathering system upstream. Salt Creek will be renamed the Enbridge Permian Gathering System. He said more acquisitions may follow but stressed the word "selective." He said the company sees "a higher oil price floor long term, and certainly a lot more terminal value than some have been thinking."
Tallgrass takes Enbridge into the DJ and Powder River Basins. Gruending said the system serves light oil, comes with an expansion project under construction, and is contracted. He characterized it as a "like-for-like substitution of Enbridge into Tallgrass," meaning no operating model change is planned. Management does not intend to link the assets to Express for Canadian heavy egress in the near term. It sees potential downstream enhancements toward Cushing instead. Ebel noted that an oil price near $80 supports activity, citing rising well counts in the Bakken.
On Western Canada, Ebel said the company's 2024 forecast of 1 million barrels per day of supply growth by 2035, which few shared at the time, "is probably too low." The regional oil sands business, which has been quiet for years, is showing signs of life. The $200 million Long Lake expansion for CNOOC, expected in service in 2028, adds a lateral and a storage tank and expands several lines. Gruending called it "a sign of more to come" and said larger customers are in the midst of negotiations that could lead to further supply growth projects. He highlighted the system's operating leverage, noting that it is prebuilt with headroom. Enbridge is also interested in the carbon sequestration pipeline, with the "right risk package," citing Indigenous partners who hold 11% of the regional system.
Mainline expansion is being resequenced. Policy uncertainty in Canada made it premature to line up customers behind the upstream MLO2 expansion, so Enbridge split it up and is pursuing the downstream pieces first. An open season on Flanagan South closed successfully, and one on Southern Access Expansion closes later this year. Gruending expects capital decisions on both by the next quarterly call. These downstream contracts carry entitlements to downstream verification on the mainline, which Gruending called "very valuable" because the mainline is likely to remain apportioned for the foreseeable future. Management also has other Express expansion ideas in development, including options under a presidential permit for larger volumes, and framed these brownfield "singles and doubles" as "insurance to the bigger greenfield moonshots." Ebel pointed to mid-November as a key date for settlement discussions among producers, Alberta and the federal government.
Gas Transmission: Beacon Commercialization Targeted for Early 2027, BC Returns Under Renegotiation
Gas Transmission is where management sees the strongest near-term demand. Ebel said gas transmission and gas distribution earnings were each up by double digits this quarter. Aspen Point entered service under budget and ahead of schedule, and Tennessee Ridgeline entered service on time on November 1, despite what Ebel called "some construction challenges." The Blackcomb pipeline is in service and Bayrunner is mechanically complete, ready to deliver gas to Rio Grande LNG. Woodfibre LNG remains on track for first gas at the end of 2027.
In the U.S. Northeast, Project Beacon, an Algonquin expansion, had a successful open season, and Matthew Akman, head of Gas Transmission, said he expects commercialization "by very early in the new year." He described the project as one that "crushes the basis," is demand-driven and has bipartisan political support, with governors urging faster permitting. On the Permian, Akman said the company is seeing interest in moving gas both east and west and suggested Enbridge may increasingly lead projects itself, such as West Texas Express, rather than relying on partnerships. He said the company can use brownfield corridors, storage positions and its execution capabilities. About 90 Bcf of storage projects are already sanctioned.
The weakest part of the portfolio is British Columbia. Akman acknowledged that the BC assets are "one of the lower returning assets in our gas portfolio" and that Enbridge is pushing for better returns to compete with U.S. opportunities. The current Westcoast toll settlement expires at year-end, with a new agreement and Canada Energy Regulator approval expected in early 2027. Akman put the nameplate return at "just above 10 on 40," meaning roughly 10% on 40% equity. Negotiations are well advanced but not finished. For further Westcoast expansions beyond those under way, he said Enbridge would seek market-based returns and is "not super keen on more risk," particularly volume risk. He estimated Canada is "2 or 3 LNG export facilities behind where we want to be" on the West Coast, and Ebel flagged expanding storage in British Columbia as an upside option.
Gas Distribution and Renewables: Rate Cases and Utility Supply Assets
The Laramie Energy acquisition replicates the Wexpro model in Utah, providing utility customers with cost-of-service gas supply. Enbridge earns a utility return without commodity exposure. Regulatory approval is expected later this month. Rate case settlements were reached in Wyoming, with rates effective in early 2027, and in Ohio, where the settlement raises revenue requirement, rate base and equity thickness. On Ohio politics, Harradence said the incoming governor is not opposed to data centers but expects them to "pay their own way." She said the $4 billion modernization program under riders is the core of growth there, with data centers and power generation "the gravy on top." Renewables remain customer-backed. Enbridge has more than 2 gigawatts under construction, including 1.4 gigawatts for Meta.
Results and Guidance: Higher EBITDA, Offsets in Liquids
Adjusted EBITDA rose by $167 million year over year. Liquids results were weaker, reflecting lower Line 9 tolls and reduced Flanagan South throughput because of high PADD II utilization and market pricing. Gas Transmission benefited from contracting and U.S. rate settlements, and Gas Distribution from higher rates in Utah and North Carolina and customer growth in Ontario. Distributable cash flow gained from EBITDA and lower maintenance capital, offset partly by higher financing costs. Enbridge reaffirmed 2026 guidance and expects to finish at the midpoint of the range, which would make it the 21st consecutive year of meeting guidance. The outlook continues to reflect lower liquids market access contribution and higher U.S. interest rates. The secured backlog stands at $38 billion, up 50% since the last Investor Day according to Ebel, and he reiterated roughly 5% growth through the end of the decade. Management is about halfway toward its target of sanctioning up to $20 billion across 2026 and 2027.