CEO COMMENT - Al Monaco, President and Chief Executive Officer
"We are pleased with our third quarter results, which reflected the resilience of our business and predictability of our cash flows," commented Al Monaco, President and Chief Executive Officer of Enbridge. "While we are encouraged by the economic activity and recovery in energy demand, we are assuming a gradual pace of recovery over the balance of 2020 and into 2021. Importantly, the early and decisive actions we took to protect the health of our people and mitigate both the operational and financial impacts to our businesses have positioned us for the future.
"Each of our core businesses performed well in the third quarter. Utilization levels in our Gas Transmission, Gas Distribution and Storage and Renewable Power businesses all remained strong and their robust commercial underpinnings continue to deliver reliable cash flows which reflect the low risk pipeline-utility business we've been talking about.
"In Liquids, Mainline heavy capacity is now fully utilized and full year volumes are tracking to the guidance range that we provided in May for the remainder of 2020, and we're on track to deliver $300 million of cost reductions in 2020. Our strong performance over the first nine months gives us confidence that we'll be near the mid-point of the DCF per share guidance range of $4.50 to $4.80.
"We've continued to make excellent progress on our strategic priorities. In Gas Transmission, the vast majority of work has been completed on Texas Eastern to ensure safe and reliable natural gas delivery and the system has returned to its normal operating capacity for eastbound service in time for the winter heating season. Construction on the T-South Expansion, Spruce Ridge and our modernization program continue to progress well.
"In Liquids, the Line 3 permitting process moved forward with the MPCA's contested case hearing process culminating in a favourable recommendation from the ALJ that dismissed all of the five issues considered. The next step will be for the MPCA Commissioner to issue the 401 Water Quality Certificate, which we anticipate by November 14th, and will support the finalization of the remaining Federal permit.
"In our renewables business, we made good construction progress on our two newest offshore wind projects in France: Saint Nazaire, a 480 MW project, is advancing well, on schedule and we've now begun construction on the 500 MW Fécamp project. In addition, we expect FID on a third project in 2021. These projects will further expand our European offshore wind business and generate high quality cash flows with solid returns.
"Elsewhere on our renewables strategy, we've just put into service our first solar self-powered compressor station on Texas Eastern and initiated work on a facility in Alberta along the Liquids Mainline, collectively delivering low-cost renewable power to our operations. These will be the first of many self-power projects we are moving forward on in the months and years to come to ensure we minimize our environmental footprint.
"I am pleased to announce that Enbridge is committing to further reduce our own emissions, and to improve our diversity and inclusion, along with strategies to achieve those targets. These targets represent a natural evolution of our approach and once again demonstrate our commitment to industry leadership. Enbridge has long been a leader in the areas of environmental, social and governance (ESG) matters and our practices have been fully integrated within our business operations and our existing strategies to grow the business.
"Enbridge is very well-positioned for a transitioning energy mix towards lower carbon fuels over time. Our diversified asset base is purposefully aligned with the global energy mix and our outlook on the fundamentals. Our long-lived pipeline and distribution assets are absolutely essential to the global economy and strategically connected to the largest demand centers and export markets, which pull volumes through our systems. And, each business is underpinned by low risk commercial models that assure the durability of our cash flows over the long term.
"In the near term, completion of our secured capital program, and embedded growth within each business, is expected to generate 5% to 7% DCF per share through 2022, and support growing free cash flow, net of capital and dividend requirements. In the near-term, our capital allocation priorities remain centered on executing our secured growth and preserving balance sheet strength and flexibility. Upon completion of our secured growth, we will maintain our prudent approach to low risk, low capital intensity utility-like growth and disciplined capital allocation including return of capital to shareholders.
"We look forward to sharing our outlook on energy fundamentals and our approach to the business going forward at our virtual Investor Day scheduled for December 8, 2020," concluded Mr. Monaco.