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Enbridge eyes new world
O&G pipeline giant turns attention to renewables, with special emphasis on offshore wind-power projects in Europe and North America Gary Park for Petroleum News
Calgary-based Enbridge, North America’s largest carrier of oil and natural gas, believes it has seen the writing on the wall and it’s actively engaged in carving out a new future by shuffling its asset mix to take advantage of the global energy transition.
Chief Executive Officer Al Monaco said that means changes to Enbridge’s supply/demand balance from the current breakdown of generating 55% of its earnings from carrying liquids, 40% from natural gas transmission and almost 5% from renewable, primarily offshore wind projects in the United Kingdom and Germany and opportunities off the coast of France.
He said offshore wind opportunities have been identified in North America, although Enbridge believes Europe has the better supply chain and more attractive power-purchase agreements, including the “sheer know-how of how to deal with offshore wind projects.”
“We also know that from a public policy perspective, Europe is quite advanced and we see very good commercial models there ... and that’s where the big prize is for us at the moment.”
‘Gradual’ transition As Enbridge takes what Monaco describes as a “gradual” approach to transition, observers will be interested to see whether its decade-old rival, TC Energy (formerly TransCanada Pipelines) takes a similar route, especially if Joe Biden wins the U.S. presidential election and delivers on his pledge to shut down TC Energy’s Keystone XL project.
Monaco said there is “still lots of runway for oil and natural gas, but it makes sense for us to mirror the global supply picture,” with the International Energy Association forecasting a five-fold increase in solar and three-fold growth in wind power consumption by 2040.
“I think you’ll find ... the vast majority of companies in our sector are positioned (to rely on the transportation of fossil fuels),” he said.
“We think having a diversified approach, having a gradual approach to transition through natural gas and renewable makes a lot of sense.”
Enbridge currently lists the value of its assets at C$170 billion, including Canada’s Mainline export oil pipeline which moves 2.9 million barrels per day from Western Canada primarily to refineries in the U.S. Midwest.
For 2020, it put price tags of C$3 billion on gas and utility projects, C$2 billion on oil and liquids pipelines and C$1 billion on renewable, indicating it is still taking a measured approach into a new world.
The IEA estimates the breakdown of global energy consumption stands at 32% for oil, coal at 28%, natural gas at 22%, biofuels at 9%, nuclear 5%, hydro at 2% and wind and solar at 1%.
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