Enbridge (ENB 0.20%) offers investors a big-time payout that yields 7%. What makes that dividend even more attractive is that it steadily grows. The Canadian energy infrastructure behemoth has increased its payout for 28 straight years. That's one of the longest streaks in the energy sector.

The company's payout seems likely to keep growing for several more years. Enbridge has a growing pipeline of development projects primarily focused on a lower carbon future to power its growth. It recently unveiled another sizable project, giving investors more visibility into its long-term growth prospects.

Adding a potentially large low-carbon expansion opportunity

Enbridge is partnering with Yara International to develop a world-scale low-carbon blue ammonia production facility (blue fuels are those produced in conjunction with carbon capture and sequestration to reduce emissions). They intend to build the proposed facility at the Enbridge Ingleside Energy Center in Corpus Christi, TX. 

The facility will have the capacity to produce between 1.2 million and 1.4 million tons of ammonia per year. They plan to design the facility to capture about 95% of the carbon dioxide produced in the process, which they intend to transport to a nearby hub for sequestration. Enbridge and Yara expect to invest about $2.6 billion to $2.9 billion to build the facility, which could start production in 2027 or 2028.

Enbridge will transport natural gas to the facility using its Texas Eastern Transmission Pipeline. Meanwhile, it's working with Occidental Petroleum subsidiary Oxy Low Carbon Ventures to advance a carbon dioxide sequestration hub to permanently store the captured carbon. Enbridge would build the transportation pipeline while Occidental is developing the underground storage hub. That carbon hub could drive additional incremental revenue for Enbridge as they secure third-party volumes from other industrial emitters in the area. 

Significant visibility into future growth

While Enbridge hasn't officially approved the blue ammonia project or its carbon hub with Occidental, they give more clarity into the company's long-term growth prospects. Currently, the bulk of Enbridge's backlog consists of projects it expects will come online through 2025. Those projects should grow distributable cash flow by around 3% per share each year.

However, the company believes cash flow growth will reaccelerate post-2025 to about 5% per year as some near-term tax-related headwinds moderate. Powering that view is a growing list of larger-scale capital projects it has under construction or in development. These include:

  • Aspen Point: A 1.2 billion Canadian dollar ($890 million) expansion of its T-North natural gas pipeline in Western Canada that should enter service in 2026.
  • Woodfibre LNG: A $1.5 billion investment in an LNG export terminal that should be operational in 2027.
  • Yara blue ammonia: A $2.6 billion to $2.9 billion joint venture to build a blue ammonia project that could start up in 2027 or 2028.
  • Dunkirk: A 600-megawatt offshore wind energy farm in France that could be operational by 2027. 
  • Sunrise: A CA$3.6 billion ($2.7 billion) expansion of its T-South pipeline that should be operational by 2028.
  • Normandy: A 1-gigawatt offshore wind farm in France that could start producing by 2030. 

The company also has many other smaller projects under development to further complement growth in the 2025 to 2030 timeframe. Most of those are lower carbon projects, including natural gas infrastructure, renewable energy, renewable natural gas, hydrogen, and carbon capture and storage. Enbridge has CA$6 billion ($4.4 billion) of annual investment capacity to fund new projects. That includes post-dividend free cash flow and incremental debt capacity while maintaining strong investment-grade credit ratings. That investment rate drives the company's view it can grow its cash flow by around 5% per year after 2025 while supporting annual dividend growth up to that level over the medium term.

A great dividend stock for the long term

Enbridge has lots of visibility into future growth. It has projects lined up that could grow its cash flow through at least 2030. Meanwhile, it has ample funding capacity to invest in those projects while paying an attractive and steadily rising dividend. Those features make Enbridge a terrific passive income stock to own long-term.