Enbridge Inc. reported its fourth quarter 2017 financial results on Feb. 19, and provided a quarterly business update.
鈥淭his has been a transformational year for our company,鈥� said Al Monaco, president and chief executive officer of Enbridge. 鈥淲ith the Spectra Energy assets now in the fold, we have successfully delivered on our strategy to re-balance our business mix with best in class natural gas transmission assets and further enhance and extend our growth potential.
鈥淲e've substantially integrated the two companies and are slightly ahead of target for capturing cost synergies as we streamline operations and create an even more effective and efficient organization.
鈥淚n addition to the merger, we significantly added to our leading infrastructure footprint, bringing a total of聽$12 billion聽of new assets into service, substantially on time and on budget. This marks the single largest year for project completion in our history and these assets will provide growing and predictable cash flows to support our premium dividend growth.
He went on, 鈥淥ur full year financial results came in roughly where we expected and within our DCF/share guidance range. However, as we had previously identified, the timing of the closing of the merger, customer project delays and facility outages, and a weak commodity price environment affecting the gas midstream and energy services businesses impacted our full year results.
鈥淔ourth quarter results were strong and demonstrate the earnings power of our core businesses. Liquids pipelines volumes reached record levels in December and the demand outlook remains robust into 2018 as Western Canada Sedimentary Basin crude production volumes continue to rise.
鈥淥ur gas transmission business delivered another rock solid quarter with steady volumes and new projects in service, and the gas distribution businesses continued to have strong rate base growth within their franchises. Importantly, we accomplished all of this while maintaining our leading operational safety and reliability performance.
Monoaco added, 鈥淲e also made good progress on our priority to strengthen the balance sheet as we build out our secured growth program, raising about聽$5 billion聽of equity or equity equivalent funding during the year. And we have a readily executable plan to achieve our longer term leverage targets by the end of 2018.
鈥淟ooking forward, with our updated strategic and financial plan, we've set a course for the next three years that reflects the right combination of capital discipline while deleveraging the balance sheet and maintaining ample funding flexibility for our聽$22 billion聽secured project inventory. We continue to see a significant opportunity set for new low risk growth in our core footprint beyond the 2020 horizon.
鈥淲e accomplished several important milestones in 2017 and we are well positioned heading into 2018 and beyond."
Project update
Enbridge reported it continues to make good progress executing on its secured growth capital program. These projects are supported by long-term take-or-pay contracts, cost-of-service frameworks or similar low-risk commercial arrangements and are diversified across a wide range of business platforms and regulatory jurisdictions.
In 2017,聽$12 billion聽of commercially secured projects were brought into service, substantially on time and on budget. This execution success highlights Enbridge's strong project management capability and its commitment to managing all critical stakeholder relationships, the company said. These projects meaningfully contributed to discounted cash flow growth in 2017, with full contributions expected in 2018 and 2019 as contracted capacity ramps up on certain projects and all contribute a full year of earnings and cash flow.
Enbridge is also advancing the remaining聽$22 billion聽secured growth project inventory. Construction has commenced on the聽US$1.3 billion聽NEXUS gas pipeline and is expected to be in service in the third quarter of 2018. Construction on the聽US$1.5 billion聽Valley Crossing pipeline in聽Texas聽is progressing well and remains on schedule for a fourth quarter 2018 in service date. The聽$0.8 billion聽Rampion offshore wind power generation project in the聽United Kingdom聽has begun generating power and full operations are expected in the first half of 2018 as the remaining turbines are connected to the grid.
Following the receipt of all required regulatory permitting for the Line 3 Replacement in聽Canada, construction began in聽August 2017聽on certain segments of the pipeline and construction will continue through the winter. Regulatory permitting is also in place in聽North Dakota聽as well as in聽Wisconsin聽where construction is substantially complete.
In聽Minnesota, the MPUC is expected to vote on the Certificate of Need and Route Permit at the end of the second quarter of 2018. In parallel with this process, additional clarification and analysis will be provided to support the adequacy of the Final Environmental Impact Statement, as requested by the MPUC in December. Management continues to anticipate an in-service date for the project in the second half of 2019.
