Canada's Enbridge invests $2.4 billion in new projects, sees best opportunities in U.S

By Sourasis Bose and Nia Williams

(Reuters) -Canada's Enbridge Inc on Wednesday set out plans to invest C$3.3 billion ($2.4 billion) in natural gas and liquids infrastructure and renewable power this year, and said there were better investment opportunities in the U.S. due to green energy subsidies.

The Calgary-based company said the Biden administration's Inflation Reduction Act, a $430-billion clean energy subsidy package, made the U.S. more competitive in attracting capital.

"Right now in the United States there are some more attractive elements when it comes to covering capital costs, and then operating costs on an ongoing basis," Chief Executive Greg Ebel said at a new conference following Enbridge's investor day.

"They've really put a lot of carrots on the table in terms of promoting people to invest there."

Enbridge, which moves about 20% of all gas consumed in the United States, will put C$2.4 billion towards gas transmission modernization and announced plans to acquire U.S. Gulf Coast gas storage assets for $335 million to strengthen its liquefied natural gas (LNG) export business.

The assets, known as Tres Palacios, comprise of 35 billion cubic feet of gas storage and the deal looks to tap into high demand for North American LNG exports after Russia's invasion of Ukraine upended global gas supplies.

Enbridge will spend $240 million constructing the 2.5 million barrel Enbridge Houston Oil Terminal, and will launch a binding open season in March to secure shipper commitments to pump an extra 95,000 barrels per day of oil on its Flanagan South system.

The company also invested $80 million to purchase a 10% equity stake in Divert Inc, a U.S-based company that converts food waste to energy, the latest in a string of investments by major energy companies in biogas, which can replace traditional natural gas but is more costly to produce.

The agreement includes further investment opportunities to develop wasted-food-to-RNG projects across the U.S., which Enbridge said will lead to more than $1 billion of new capital growth underpinned by long-term contracts.

Enbridge expects its renewable portfolio to grow over 400% by 2028. The company also forecast an annual core earnings growth rate of 4%-6% through 2025.

Enbridge shares closed up 1% on the Toronto Stock Exchange at C$51.70.

($1 = 1.3585 Canadian dollars)

(Reporting by Sourasis Bose in Bengaluru and Nia Williams in British Columbia; Editing by Sriraj Kalluvila and Stephen Coates)