By Tanay Dhumal and Rod Nickel
(Reuters) -North American pipeline operator Enbridge (NYSE:ENB) raised its short-term profit growth forecast on Wednesday and said it will spend $500 million expanding pipeline and storage assets to improve its U.S. Gulf Coast presence.
The Calgary, Alberta-based firm raised its core profit growth forecast to between 7% and 9% through 2026 - from 4%-6% through 2025 - saying the increase is primarily driven by its $14 billion acquisition of three U.S. gas utility companies from Dominion Energy (NYSE:D).
Enbridge, which operates North America's biggest oil pipeline network, the Mainline, said it expects Western Canadian oil production to grow by 500,000 barrels per day (bpd), or 10%, through 2025. That growth will fill pipeline capacity to 99% by 2026, executive vice president of liquids Colin Gruending said at a New York investor meeting.
A near tripling of capacity on the rival Trans Mountain oil pipeline, scheduled for the second quarter, will not take a large volume from the Mainline, Gruending said.
Enbridge can add 200,000 bpd capacity, or 7%, to the Mainline to meet growing U.S. Gulf of Mexico demand without spending much capital, CEO Greg Ebel said.
"We can continue to be optimistic about the pipeline capabilities beyond a big build-out, to actually add those volumes," Ebel told reporters on a phone call.
The company said it will acquire two marine docks and land from U.S. oil refiner Flint Hills Resources for about $200 million.
The assets are next to the Enbridge Ingleside Energy Center, the largest crude oil storage and export terminal by volume in the United States.
The company will spend $100 million expanding its Gray Oak oil pipeline in Texas.
Enbridge also sanctioned $200 million of offshore pipelines to service Shell (LON:SHEL) and Equinor's planned Sparta offshore oil and gas project in the Gulf.
The plans come over a month after Enbridge said it will reduce its workforce to cut costs.
Enbridge shares rose 0.9% in New York.