Major Oil Pipeline Operators Plan Higher Dividends

Major Oil Pipeline Operators Plan Higher Dividends

The major North American pipeline operators Kinder Morgan and Enbridge issued optimistic updates to the market this week, planning higher dividends and expecting more profits next year, after the challenges the oil industry has faced this year.

Enbridge raised its quarterly dividend by 3 percent to US$0.65 (C$0.835), effective March 1, 2021. This is the twenty-sixth consecutive year in which the oil and gas pipeline operator has increased its common share dividend.

Last week, Enbridge started construction on the Line 3 oil pipeline replacement in Minnesota after receiving all necessary approvals and permits.

Kinder Morgan, for its part, announced on Tuesday its expectations for its financial performance next year.

The company expects US$1.2 billion in net profit for 2021, after a slim US$100 million net income expected for this year. The small 2020 net profit will be due to hefty impairments the pipeline operator has made throughout the year.

Kinder Morgan also expects to raise its dividend for 2021 by 3 percent compared to this year. The company expects the board to declare a Q4 dividend of US$0.2625 per share or US$1.05 annualized. The board expects the 2021 dividend to be US$1.08 per share annualized, or a 3-percent increase from the 2020 dividend.