Enbridge unfazed by prospect of more Venezuelan oil headed to Gulf Coast

Enbridge company logos are seen at the company's annual meeting in Calgary, Thursday, May 12, 2016. THE CANADIAN PRESS/Jeff McIntosh

CALGARY — Executives with crude shipper Enbridge Inc. say increased Venezuelan crude exports would not undermine its plans to send more Alberta oilsands barrels to Texas refineries.

“The U.S. Gulf Coast is the world’s best heavy refining market and Canadian crude is a meat-and-potato part of the diet there,” Colin Gruending, president for liquids pipelines, told analysts on a conference call Friday.

Refineries along the Gulf of Mexico were initially built to handle the heavy crude produced in Venezuela. But as volumes from the South American country dropped amid economic and political strife and U.S. sanctions, barrels from Canada with a similar chemical makeup have been filling the gap.

However, less than one tenth of Canadian exports to the U.S. are bound for the Gulf Coast, with the lion’s share headed to the Midwest.

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Enbridge has announced plans to increase that in the coming years through a series of expansions to its cross-border network.

In November, it announced it will proceed with the first phase of its Mainline Optimization project, which will see 150,000 barrels per day of capacity added to its vast cross-Canada system, the backbone of the country’s oil transport infrastructure that taps into the U.S. Midwest.

The US$1.4-billion plan will also add 100,000 barrels per day of capacity to the Flanagan South system, enabling greater volumes to flow from Illinois to the U.S. Gulf Coast.

Enbridge has said a second Mainline Optimization phase could add another 250,000 barrels per day of capacity in 2028.

The company has not appeared spooked by events in Venezuela that occurred two months after that announcement.

In early January, the U.S. military captured former leader Nicolas Maduro and removed him from power. U.S. President Donald Trump has since been courting U.S. energy majors to revive Venezuela’s beleaguered energy sector, which in recent years has been able to only tap a tiny fraction of its massive potential.

That’s raised the spectre of Venezuelan barrels pushing Canadian ones out of the Gulf Coast market.

“It’s early days and certainly the longer-term outcome there is uncertain,” said Gruending. “But we’ll see how quickly Venezuela grows its production. Then we’ll also need to evaluate what portion of that increased supply growth comes to the U.S. Gulf Coast.”

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Some Venezuelan oil might continue to travel by sea to international buyers, like China, as sanctioned shipments have been doing via a so-called “shadow fleet.” Gruending added that there’s also some untapped refining capacity in the U.S. Gulf Coast and the possibility for more Canadian crude to be shipped overseas via the Gulf of Mexico.

“The Venezuela piece is a supplement to Canadian heavies, not a replacement,” said CEO Greg Ebel.

Mainline expansions beyond those already announced would depend not only on the Venezuelan situation, but on what’s happening at home, he added.

He said much has been made of a potential West Coast pipeline and accompanying Pathways carbon capture project that were part of an energy accord signed late last year between Ottawa and Alberta.

But he said a third “p” too often gets overlooked — production, and the right policy environment to ensure there is enough oil to fill the pipeline.

Enbridge is one of the pipeline firms advising the Alberta government as it prepares an application for a B.C. pipeline proposal to the federal major projects office, established last year to speed along infrastructure projects deemed in Canada’s national interest.

Ebel said the company is still not comfortable putting its capital toward such a project.

“I don’t think investors or the infrastructure companies should be taking on all that risk of the development in jurisdictions that have historically created a challenge … You saw that in Northern Gateway. We spent $600 million ... and the rug was pulled out from underneath,” he said, referring to the defunct proposal that Ottawa killed about a decade ago.

“So that’s not the type of risk that we’re looking to take on at this time. We don’t need to with all the other opportunities.”

Enbridge shares jumped more than four per cent to $73.61 in afternoon trading on the TSX after it announced earnings that exceeded market expectations.

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Earlier Friday, Enbridge said it made a profit of $1.95 billion in the fourth quarter, up from $493 million in the same quarter last year.

Earnings attributable to common shareholders worked out to 89 cents per share for the quarter ending Dec. 31, up from 23 cents per share the prior year.

Adjusted earnings came in at 88 cents per share in the fourth quarter, up from 75 cents per share in the same quarter of 2024.

Analysts on average had expected an adjusted profit of 77 cents per share, according to data compiled by LSEG Data & Analytics.

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Lauren Krugel, The Canadian Press

This report by The Canadian Press was first published Feb. 13, 2026.