Enbridge Inc. (NYSE:ENB) Q4 2022 Earnings Call Transcript

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We don’t have comments on time line. I don’t think that’s helpful, but we are making progress. And either outcome here will be competitive for our customers and investors. So I don’t know, I probably over answered that, Robert, but it is a good question.

Robert Kwan: Great. I appreciate the color. If I could just finish on capital allocation or capital recycling, you had a good amount of activity in 2022. I’m just wondering how active do you intend to be both on monetization front as well? Just on acquisitions, it’s not new that you’re focusing on tuck-ins, but the annual disclosures very specifically no tuck-ins. Just some thoughts as well as to how you might be approaching larger deals? Or is it really the focus on tech in when it comes to M&A.

Greg Ebel: Yes. Well, first and foremost, I think the reason why we can even consider those types of things, Robert, is that strong focus on the capital allocation starts with the maintenance of our balance sheet and the equity sales financing model. And all that, of course, ultimately ends up in being able to increase that dividend on a steady basis. But you’ve seen us recycle capital over the last 4, 5 years, $10 billion plus. That allows us as well as some of the capacity on the balance sheet to go out and do tuck-ins. We will continue to look at those. And the next thing is for a company the size of Enbridge, with the self-equity financing model and the balance sheet capacity, we €“ tuck-ins for us are pretty substantial deals.

I mean we would refer to Ingleside as a tuck-in €“ from that perspective. And as you know, it’s in the $3 billion range and look at the opportunities that then it created, frankly, the management team, great job in getting a solution over the many years to DCP, and it leads to Gray Oak and then leads to Cactus and some of the opportunities. And I would even argue to the work we’re now doing in the early stages with Oxy and pieces like that. So I think you can continue to watch for that, continue to see us look at tuck-ins. I don’t think we explicitly said in our 2023 guidance, we wouldn’t do that. That is part of the core of what we are able to do now. And you should expect to continue to see that in a smart stuff that we can fit in and they can add incremental value, not just to the business that maybe it’s coming to, but also that horizontal perspective of some of those tuck-ins.

And that includes on the new energy technology side. Look, Matthew and the team bringing in Tri Global Energy, that’s a great example and a whole variety of opportunities. And I know all the business units are looking at those types of things, again, driven by the strong balance sheet and the ability to equity self-finance.

Robert Kwan: That’s great. Appreciate the color. Thank you.

Operator: We will take our next question from Jeremy Tonet with JPMorgan. Your line is open.

Jeremy Tonet: Hi. Good morning, and all the best in retirement, Greg, looking forward to working with you going forward here. Just wanted to pivot towards, I guess, WCSB and expansion, really specifically construction risk going forward. We see a lot of projects out there. We see issues that cost overrun and we see pressure on the contractors, the strength of those companies. And so just wondering, as you look at expansions with T-South, how do you think about addressing project cost risk, given the dynamics and what we’ve seen in the basin so far?

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