Enbridge Inc. has made a nearly $2.5-billion bet that demand for Canadian oil and gas won’t slow down anytime soon as it announced large capital investments aimed at growing capacity on its Mainline crude pipeline to the United States and expanding natural gas transmission in Northern British Columbia.

The Calgary-based pipeline giant said it plans to boost capacity on its Mainline pipeline carrying crude from Western Canada to markets in the east and U.S. Midwest by 300,000 barrels per day (b/d) by 2028.

Enbridge said it may surprise some that Mainline has been in “apportionment” — an industry term indicating that demand from shippers exceeds a pipeline’s available capacity — for the past few months, despite the looming threat of U.S. tariffs on Canadian energy.

There had been speculation among investors that just the threat of a 10 per cent tariff on Canadian crude could divert more barrels west through the expanded Trans Mountain pipeline (TMX) to the B.C. coast.

“In fact, we (haven’t had) enough pipeline capacity to serve the needs of our customers the last several months,” chief executive Greg Ebel told reporters at the company’s annual investor day conference. “It would take a very long time of sustained tariffs before you would see changing trade patterns and flow patterns, just given the nature of where that product is going, largely to serve U.S. refineries.”

Ebel said it would be very difficult for U.S. refineries to find other sources of supply and equally difficult for Canadian producers to find other sources of demand, beyond what they’re already getting on TMX.

Enbridge said it will spend $2 billion through 2028 on improving reliability and adding to Mainline’s current 3.2 million b/d capacity.

The company also announced a $400-million expansion of its T-North pipeline system in Northern B.C., adding around 200 million cubic feet per day of natural gas transportation out of the Montney shale basin, with an expected in-service date in 2028.

This is T-North’s second expansion, which is being driven by demand associated with liquefied natural gas export projects on the West Coast.

The announcements on Tuesday came on the same day U.S. President Donald Trump‘s sweeping tariffs on Canada and Mexico went into effect, prompting broad losses on North American stock markets.

“As Canadians, we must now recognize the relationship with our closest friend, ally and trading partner has fundamentally changed,” the Canadian Association of Petroleum Producers (CAPP) said in a statement, urging Ottawa to act quickly to boost competitiveness in response to the U.S. tariffs.

“(We) must act with urgency to focus on the Canadian national interest. Without greater global market reach and energy security, Canada has little leverage in our trade relationship with the United States.”

Still, few in the energy sector believe a 10 per cent tariff will lead to significant declines in the demand for Canadian crude south of the border.

The U.S. is the world’s largest oil producer, but American refiners have become reliant on Canadian heavy oil over the past decade to produce gasoline and other fuels.

As a result, the price impacts from the energy tariffs are expected to affect some U.S. regions in a matter of one week to three weeks, according to Patrick De Haan, head of petroleum analysis at GasBuddy, with consumers in the U.S. northeast expected to see the most significant jump of around 20 cents U.S. to 40 cents U.S. per gallon by mid-March.

Ebel said the tariffs on energy were of some concern, but Canada and the U.S. remained connected.

“You can’t say it’s of no concern,” he said. “It is just from a fundamentals’ perspective, (if) you’re really trying to take the emotions out of it and go to what is the economic reality and the interconnection between the two countries … on any basis, you would still say it is tight, it is difficult to break and it is strong,” he said. “Current unpleasantries aside.”

Late Tuesday, U.S. Commerce Secretary Howard Lutnick said there could be a possibility of tariff relief for Canada and Mexico.

“Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better, and the president’s listening, because you know he’s very, very fair and very reasonable,” he said in an interview with Fox Business.

— With files from the Canadian Press and Bloomberg News.

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