Enbridge Inc. ( ENB ) shares are trading lower on Friday after the company announced it has made a final investment decision for the Mainline Optimization Phase 1 (MLO1) project.

Project Capex

Enbridge ( ENB ) plans to invest approximately $1.4 billion in the project, adding 150 kbpd of capacity to the Mainline system and 100 kbpd to the FSP.

The company expects the new capacity to come online in 2027.

Details

The project will expand its Mainline network and Flanagan South Pipeline (FSP) and boost Canadian heavy oil deliveries to major U.S. refining markets in the Midwest (PADD II) and Gulf Coast (PADD III) to meet rising customer demand.

MLO1 will increase Mainline capacity through upstream optimizations and terminal upgrades.

Enbridge ( ENB ) also plans to expand FSP by adding pump stations and terminal enhancements, while leveraging existing Seaway Pipeline capacity.

The FSP expansion is supported by long-term take-or-pay contracts for full-path service from Edmonton, Alberta, to Houston, Texas, ensuring strong returns for MLO1.

Management Commentary

Colin Gruending, Enbridge’s executive vice president and president of Liquids Pipelines added, “This project demonstrates the competitive advantage of leveraging existing networks to meet growing customer demand, supporting long-term energy security and affordability across North America.”

Recent Earnings Results

Last week, the company reported third-quarter adjusted EPS of 33 cents, missing the 39-cent estimate, and revenue of $10.633 billion, below the $10.860 billion consensus.

Price Action: ENB shares are down 2.54% at $47.04 at the last check on Friday.

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