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Enbridge exceeds profit expectations, sanctions new projects to meet energy demand

Enbridge, a pipeline operator in North America, beat expectations on Friday for its?fourth quarter profit. It also said that it sanctioned a number of projects to meet the soaring demand for electricity across North America.

Pipeline operators 'benefit from an increase in demand for natural gas due to liquefied gas exports and the increased power generation associated with artificial intelligence and data centres.

Earlier that day, TC Energy beat the market's expectations for quarterly profits on the backs of increasing natural gas?demand.

Enbridge has a backlog of projects worth C$39 billion (28.63 billion dollars) and C$8 billion is expected to be completed this year.

The company sanctioned 2 renewable energy projects for the fourth quarter - one $1.2 billion project to be built in Wyoming by a large technology company and another $400 million onshore wind project being constructed in Texas, which will support Meta Platforms data center operations.

"We are continuing to pursue?over 50?data center?opportunities in North America. This will require up to 10 billion cubic foot per day of new takeaway capability," said CEO Greg Ebel, adding that the firm expects to sanction more projects by 2026.

The company's shares rose by nearly 3%, reaching a new high of C$72.57.

RESULTS SURPASS MARKET EXPECTATIONS

According to LSEG, Enbridge reported a profit adjusted of 88 Canadian Cents per share in the fourth quarter, compared to estimates of 77 Canadian Cents.

UBS analyst Manav gupta stated that Enbridge "continues?to prioritize balance sheet strength...while?still looking at low-multiple Brownfield opportunities and utility like growth."

Analysts have warned that the results are coming as North American energy companies prepare for an increase in Venezuelan production. This could further 'pressure Canadian oil prices, as Canada's oil companies sell similar heavy oil.

However, Ebel said that the company did not expect any'material impact' from the recent geopolitical events in Venezuela. He added that the increased production from Venezuela would be a complement to Canadian heavy crudes and not a substitute.

(source: Reuters)