Enbridge (ENB 2.83%) pays a mammoth dividend. The Canadian pipeline and utility company's payout currently clocks in at 6.3%, which is several times higher than the S&P 500's 1.6% dividend yield.

Even better, Enbridge has continued to increase that payout. It's giving investors a 3.2% raise in 2023, marking its 28th straight year of dividend growth.

The company should be able to keep growing its payout in the future, thanks partly to its massive backlog of expansion projects. It's also continuing to explore new growth drivers.

One potentially enormous opportunity it's working to capitalize on is carbon capture and storage (CCS). That technology could bolster its legacy fossil fuels business while providing a powerful new growth driver.

Exploring a potential partnership in Texas

Enbridge recently announced plans to work with a subsidiary of oil giant Occidental Petroleum (OXY 0.89%) to develop a carbon-dioxide sequestration hub in the Corpus Christi area of the Texas Gulf Coast. They would like to provide a complete carbon-dioxide solution to emitters in the area by developing a pipeline transportation system and sequestration facility.

Enbridge would develop, build, and operate pipeline facilities, while Occidental would do the same for the sequestration complex. They could then market the solution to third-party emitters that would pay fees to Enbridge and Occidental Petroleum for transporting and sequestering the carbon dioxide.   

Occidental is a big believer in the future of CCS. The oil company estimates it could become a $3 trillion to $4 trillion global industry. Occidental thinks it could eventually make as much money on this technology as it currently produces from its legacy oil and gas operations.

It could also be a big money-maker for Enbridge, as it provides pipelines and other services for carbon dioxide. Meanwhile, because CCS would lower the carbon intensity of fossil fuels, it could extend their lives. That would benefit Enbridge's legacy pipeline, storage, and export operations, which could continue generating steadily growing cash flow for decades.

Looking for opportunities up and down the value chain

Enbridge's partnership with Occidental is one of many potential CCS projects the company is pursuing. Earlier this year, the company and Humble Midstream unveiled plans to develop low-carbon hydrogen and ammonia production and export facilities at the Enbridge Ingleside Energy Center. Up to 95% of the carbon dioxide generated in the production process will be sequestered in newly developed carbon capture infrastructure, including those owned and operated by Enbridge.

It also won the right to pursue the development of a carbon sequestration hub in Alberta, Canada. It's working on the Open Access Wabamun Carbon Hub, which would support near-term carbon capture projects under development by Capital Power and Lehigh Cement. 

The hub could help those two companies avoid emitting nearly 4 million tons of carbon dioxide, equal to removing 1.2 million cars from the road each year. This project could start service in phases as early as 2025. It would be one of the largest integrated CCS projects in the world. The hub could also expand to support other nearby industrial companies looking to decarbonize their emissions.

Enbridge could invest across the entire CCS value chain, including carbon dioxide capture facilities, pipeline transportation assets, and permanent storage. Those assets could generate steady cash flow underpinned by long-term contracts or government-regulated rate structures, making them ideally suited for Enbridge's low-risk business model. That would also help sustain and grow the company's high-yielding dividend.

A potentially massive growth driver

CCS could be an enormous opportunity for Enbridge. It could extend the life of its legacy fossil fuels infrastructure while giving it new opportunities to provide customers with decarbonization services. Those dual drivers could provide Enbridge with fuel to help sustain and grow its big-time dividend for years to come. That would further enhance the company's appeal to those seeking a sustainable passive-income stream.