June 6, 2017 / 12:03 AM / 2 months ago

Fortis could top growth goal with new power, LNG projects

(Reuters) - Canadian energy company Fortis Inc could beat its annual 5 percent growth target with new LNG and power transmission projects in the United States and Canada, the company's chief executive said in an interview on Monday.

Fortis, one of the top 15 utility firms in North America, is also likely to compete for projects included in U.S. President Donald Trump's trillion-dollar infrastructure plan, Chief Executive Barry Perry told Reuters.

Even without the infrastructure plan projects, the firm expects to make investment decisions on projects this year that would allow it to beat its own growth goals, Perry said.

"I'm confident we will land some of those projects," he said. "If we can be successful in one or two of those, it will boost our annual growth rate above the 5 percent we have already forecast."

The stock hit an all-time high of C$45.52 on the Toronto exchange on Monday. The firm is based in St John's, Newfoundland and Labrador and operates in Canada, the United States and three Caribbean countries.

The proposed new projects include a C$1-2 billion ($742.12 million to $1.48 billion) investment in an LNG export terminal in British Columbia, a C$600 million gas pipeline to another company's proposed LNG export terminal also in British Columbia, and two C$1 billion plus power lines - one in Ontario and another connecting Ontario to Pennsylvania.

In British Columbia, Fortis expects a C$400 million LNG storage facility in Tilbury to enter service in July to be used to provide fuel to local transportation - long haul trucking, fleet vehicles, ferries and other marine shipping.

Fortis is considering expansion at the site and is talking with Japanese firms to build an LNG export terminal there. Progress on that project was at least a year off, he said.

Fortis could also land a C$600 million project to build a pipeline to a proposed LNG export facility in British Colombia. Privately-held Woodfibre LNG proposed the LNG facility, which would be the first in Canada if it were built. Fortis expects Woodfibre to make a decision on the project by the end of 2017, Perry said.

Among other projects, Fortis would like to develop two power lines worth over C$1 billion each. They are the Lake Erie Connector between Ontario and Pennsylvania and the Wataynikaneyap transmission project to connect 22 First Nation communities in northern Ontario to the provincial power grid.

The company was hoping to decide on the 1,000-megawatt Lake Erie Connector by the end of the year, Perry said.

ACQUISITIONS ON THE BACKBURNER

Fortis has made several U.S. acquisitions in the last decade, most recently last year when it completed the purchase of Novi, Michigan-based power transmission company ITC Holdings in a deal initially worth $11.3 billion.

Further utility dealmaking was "on the backburner" as the company integrated ITC, Perry said, noting the company would be open to further acquisitions in North America at a later date.

In terms of future U.S. investments, Perry said the company was waiting for Trump's infrastructure plan, which could include some multi-state power line projects that Fortis would be well positioned to bid on through ITC.

Trump is due to detail the infrastructure plan this week. It was one of his key campaign proposals to revitalize the U.S. economy. Many firms and funds have expressed interest in investing in the projects, which Trump wants mostly funded by the private sector. In May, Saudi Arabia's sovereign wealth fund and Blackstone Group said they were setting up a $40 billion fund to deploy primarily into U.S. projects.

Editing by Simon Webb and Diane Craft

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