UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

ENBRIDGE INC.

(Exact name of Registrant as specified in its charter)

Canada (State or other jurisdiction of incorporation or organization)		None (I.R.S. Employer Identification No.)

3000, 425 – 1^st Street S.W.
Calgary, Alberta, Canada T2P 3L8
(Address of principal executive offices and postal code)

(403) 231-3900
(Registrants telephone number, including area code)

[Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.]

Form 20-F o            Form 40-F þ

[Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934].

Yes o            No þ

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM S-8 (FILE NO. 333-13456, 333-97305 AND 333-6436), FORM F-3 (FILE NO. 33-77022) AND FORM F-10 (FILE NO. 333-122526) OF ENBRIDGE INC. AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

The following document is being submitted herewith:

•		Press Release dated August 2, 2006.
•		Interim Report to Shareholders for the six months ended June 30, 2006.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ENBRIDGE INC.
		(Registrant)
Date: August 2, 2006		By:	/s/ “Alison T. Love”
			Alison T. Love
			Vice President & Corporate Secretary

NEWS RELEASE

Enbridge reports first half earnings of $348.8 million

Highlights

	•		Adjusted operating earnings for the second quarter increase 24% to $118.7 million
	•		Adjusted operating earnings for the first half increase 9% to $328.2 million
	•		US$920 million Southern Lights diluent pipeline receives commitments exceeding the planned capacity
	•		US$350 million Southern Access Extension Project receives shipper support
	•		$250 million contract storage terminal to be constructed at Hardisty, Alberta

CALGARY, Alberta, August 2, 2006 — “Our financial results are again very strong, with second quarter adjusted operating earnings per share increasing markedly, which leaves us well positioned to meet our previously stated objectives for the year,” said Patrick D. Daniel, President & Chief Executive Officer of Enbridge Inc. “Over the last few years we have announced a large number of projects that respond to increasingly strong industry fundamentals. These projects span an array of oil and gas transportation and storage opportunities and are in various stages of development.”

Mr. Daniel added, “Most notably, Enbridge continues to develop new crude oil market access pipelines including our Gateway, Alberta Clipper and Southern Access projects as well as a variety of alternatives to move Canadian oil sands crude oil to the Gulf of Mexico. These initiatives and projects will ensure that our customers have sufficient access to the right markets at the right time. This robust slate of projects provides us with significant growth opportunities in our existing lines of business, where we have historically been very successful, and will enable us to generate superior returns to shareholders.”

On August 1, 2006, the Enbridge Board of Directors declared quarterly dividends of $0.2875 per common share and $0.34375 per Series A Preferred Share. Both dividends are payable on September 1, 2006 to shareholders of record on August 15, 2006.

The Board of Directors also announced that it had accepted, with regret, the resignation of William R. Fatt, a Director since 2000, due to increasing commitments associated with Mr. Fatt’s role as Chief Financial Officer of Fairmont Hotels & Resorts Inc.

Earnings applicable to common shareholders were $348.8 million for the six months ended June 30, 2006, or $1.03 per share, compared with $314.2 million or $0.93 per share in 2005. The $34.6 million increase in earnings was attributed to strong performance from the Enbridge crude oil mainline system and $48.9 million from the revaluation of future income tax balances due to tax rate reductions. These positive factors were partially offset by a lower contribution from the gas distribution utility, as weather in the Ontario market area was significantly warmer than normal.

Earnings applicable to common shareholders were $157.9 million for the three months ended June 30, 2006, or $0.47 per share, compared with $93.6 million, or $0.27 per share in 2005. The $64.3 million increase in earnings reflected similar factors as those identified in the six month analysis except the weather impact at the gas distribution utility was less significant as the second quarter is seasonally a quarter in which lower volumes are distributed.

Consolidated Earnings

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Liquids Pipelines			68.6				53.6				134.9				106.6
Gas Pipelines			15.9				18.7				31.9				37.0
Sponsored Investments			23.2				14.5				43.4				32.9
Gas Distribution and Services			34.0				2.9				120.0				130.7
International			21.3				20.4				43.1				38.6
Corporate			(5.1	)			(16.5	)			(24.5	)			(31.6	)
			157.9				93.6				348.8				314.2

Non-GAAP Measures

This news release contains references to adjusted operating earnings, which represent earnings applicable to common shareholders adjusted for non-operating factors. This is not a measure that has a standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with a similar measure presented by other issuers. Management believes that the presentation of adjusted operating earnings provides useful information to investors and shareholders as it provides increased predictive value and performance trends.

		Three months ended								Six months ended
(millions of Canadian dollars, except per share amounts)		June 30,								June 30,
		2006				2005				2006				2005
GAAP earnings as reported			157.9				93.6				348.8				314.2
Non-operating factors and variances as per table below			(39.2	)			2.0				(20.6	)			(13.6	)
Adjusted Operating Earnings			118.7				95.6				328.2				300.6
Adjusted Operating Earnings per Common Share			0.35				0.28				0.97				0.89

Significant after-tax non-operating factors and variances affecting consolidated earnings were as follows:

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Sponsored Investments
Dilution gain on EEP unit issuance			—				—				—				4.6
EEP non-cash derivative fair value gains/(losses)			(0.3	)			—				2.4				—
Revalue future income taxes due to tax rate changes			6.0				—				6.0				—
Gas Distribution and Services
Colder/(warmer) than normal weather affecting EGD			(9.4	)			(2.0	)			(30.7	)			1.7
Dilution gain in Noverco (Gaz Metro unit issuance)			—				—				—				7.3
Revalue future income taxes due to tax rate changes			28.9				—				28.9				—
Corporate
Revalue future income taxes due to tax rate changes			14.0				—				14.0				—
Total significant after-tax non-operating factors and variances increasing/(decreasing) earnings			39.2				(2.0	)			20.6				13.6

Significant operating factors affecting consolidated earnings in 2006 included the following:

•

Enbridge crude oil mainline system earnings were higher primarily due to lower oil losses, higher earnings from Terrace and the Incentive Tolling Settlement (ITS).

•

Enbridge Energy Partners earnings have increased significantly with higher crude oil throughput, strong margins and increased volumes in the natural gas gathering and processing businesses.

•

Corporate costs increased as certain floating interest rate financings were replaced with longer term fixed rate debt.

The Company has foreign currency denominated earnings, primarily from U.S. based operations and investments, as well as its Euro investment in CLH. The Company uses long-term derivative contracts to economically hedge a significant portion of the cash distributions from these long-term investments. However, this does not eliminate the GAAP earnings volatility caused by exchange rate differences. During the first half of 2006, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in $9.8 million (2005 — $5.4 million) of incremental cash flows, which were not included in reported earnings.

Liquids Pipelines

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
	2006				2005				2006				2005
Enbridge System			48.9				39.5				100.9				78.4
Athabasca System			13.8				11.4				26.1				23.7
Spearhead Pipeline			2.4				(0.1	)			2.7				(0.6	)
Olympic Pipeline			2.0				—				2.6				—
NW System			1.6				1.9				2.6				3.7
Feeder Pipelines and Other			(0.1	)			0.9				—				1.4
			68.6				53.6				134.9				106.6

•

The Enbridge System reflected higher earnings from a number of factors including lower oil losses, performance incentives under the ITS and, within Terrace, lower taxes, higher toll revenues and the impact of higher volumes on the surcharge revenue.

•

Athabasca System earnings continued to grow as infrastructure additions contributed positively, but were partially offset by higher operating expenses.

•

Spearhead Pipeline commenced commercial operations in early March, 2006.

•

Olympic Pipeline was acquired effective February 1, 2006.

Gas Pipelines

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
	2006				2005				2006				2005
Alliance Pipeline US			7.2				8.5				14.5				16.4
Vector Pipeline			2.7				3.6				6.8				8.0
Enbridge Offshore Pipelines			6.0				6.6				10.6				12.6
			15.9				18.7				31.9				37.0

•

Alliance Pipeline US earnings were lower due to the stronger Canadian dollar in the first half of 2006 in comparison with the first half of 2005.

•

Vector Pipeline earnings were also impacted by the stronger Canadian dollar and higher operating costs in the second quarter of 2006 due to scheduled integrity inspections required by the regulator within the first six years of operation.

•

Enbridge Offshore Pipelines earnings are lower than the prior year; however, volumes returned to pre-hurricane levels during the second quarter of 2006. The stronger Canadian dollar also reduced earnings.

Sponsored Investments

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Enbridge Income Fund (EIF)			8.7				8.4				18.0				16.7
Enbridge Energy Partners (EEP)			8.5				6.1				19.4				11.6
Dilution gains in EEP			—				—				—				4.6
Revalue future income taxes due to tax rate changes			6.0				—				6.0				—
			23.2				14.5				43.4				32.9

•

EEP’s contribution to 2006 results improved significantly, despite the stronger Canadian dollar, and reflected considerably higher liquids throughput on the Lakehead System, higher margins and increased volumes in the natural gas gathering and processing businesses. The first half of 2006 also included $2.4 million (net to Enbridge) of unrealized mark-to-market gains on derivative financial instruments that do not qualify for hedge accounting treatment (loss of $0.3 million in the second quarter of 2006).

•

EEP issued partnership units in the first quarter of 2005 and because Enbridge did not fully participate in these offerings, dilution gains resulted. There were no unit issuances in the first half of 2006.

Gas Distribution and Services

			Three months ended								Six months ended
(millions of Canadian dollars)			June 30,								June 30,
		2006				2005				2006				2005
Enbridge Gas Distribution (EGD)			(5.1	)			(2.8	)			53.2				88.3
Noverco			1.2				(2.1	)			15.1				19.8
CustomerWorks/ECS			3.7				6.2				10.3				12.3
Other Gas Distribution			0.6				1.1				5.3				5.9
Enbridge Gas New Brunswick			2.5				1.0				4.3				2.0
Gas Services			(1.3	)			(1.0	)			(0.3	)			(0.1	)
Aux Sable			0.2				0.6				1.2				3.8
Other			3.3				(0.1	)			2.0				(1.3	)
Revalue future income taxes due to tax rate changes			28.9				—				28.9				—
			34.0				2.9				120.0				130.7

•

EGD’s distribution volumes and earnings in 2006 were impacted by warmer weather. The weather in Ontario was warmer than normal in 2006 and reduced earnings by $30.7 million ($9.4 million in the second quarter) whereas weather was colder than normal and increased earnings by $1.7 million in the prior year ($2.0 million warmer than normal in the second quarter). EGD earnings were also reduced by a lower regulated rate of return on common equity, partially offset by a higher regulator approved rate base. The timing of operating and maintenance activities also increased earnings in the second quarter of 2006.

•

Noverco earnings were higher in the second quarter as the prior year included increased future income tax expense due to adjustments for reciprocal dividends and a significant cash dividend. In addition, the first quarter of the prior year included a $7.3 million dilution gain from a Gaz Metro LP unit issuance in which Noverco did not participate.

•

Aux Sable earnings were lower despite positive fractionation margins during the first half of 2006. Aux Sable entered into an output arrangement effective January 1, 2006, that eliminates substantially all negative earnings variability. Aux Sable now receives a fixed annual fee and upside sharing above a certain fractionation margin level. As the upside sharing is an annual measure, earnings in the first half of 2006 reflect only the fixed fee portion of the payment. Any upside sharing will be recorded when earned, in accordance with accounting rules for revenue recognition.

International

			Three months ended								Six months ended
(millions of Canadian dollars)			June 30,								June 30,
		2006				2005				2006				2005
CLH			14.7				14.0				28.0				25.6
OCENSA/CITCol			8.1				8.0				16.3				16.2
Other			(1.5	)			(1.6	)			(1.2	)			(3.2	)
			21.3				20.4				43.1				38.6

•

The Company’s international investments continued to show strong performance with no significant variances to note.

Corporate

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Corporate			(19.1	)			(16.5	)			(38.5	)			(31.6	)
Revalue future income taxes due to tax rate changes			14.0				—				14.0				—
			(5.1	)			(16.5	)			(24.5	)			(31.6	)

The increase in Corporate costs was primarily due to higher interest expense as a portion of the Company’s floating rate debt was repaid through the issuance of long-term fixed rate debt.

Conference Call

Enbridge will hold a conference call on Wednesday, August 2, 2006 at 9:30 a.m. Eastern time (7:30 a.m. Mountain time) to discuss the second quarter 2006 results. The call can be accessed at 1-866-578-5784 using the access code of 47924483, and will be audio webcast live at www.enbridge.com/investor. An audio replay will be available shortly thereafter at 1-888-286-8010 using the access code 32632815; in addition, the webcast replay and transcript will be available on the website, later in the day.

The unaudited interim consolidated financial statements and Management’s Discussion and Analysis, which contain additional notes and disclosures, are available on the Enbridge website.

Enbridge Inc., a Canadian company, is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States, the world’s longest crude oil and liquids pipeline system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada’s largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,600 people, primarily in Canada, the United States and South America. Enbridge’s common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB. Information about Enbridge is available on the Company’s website at www.enbridge.com.

Certain information provided in this news release constitutes forward-looking statements. The words “anticipate”, “expect”, “project”, “estimate”, “forecast” and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Except to the extent required by applicable securities laws and regulations, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Enbridge Contacts:

Media		Investment Community
Jim Rennie		Bob Rahn
(403) 231-3931		(403) 231-7398
E-mail: jim.rennie@enbridge.com		E-mail: bob.rahn@enbridge.com

ENBRIDGE INC.
HIGHLIGHTS

		Three months ended								Six months ended
(unaudited; millions of Canadian dollars, except per share amounts)		June 30,								June 30,
		2006				2005				2006				2005
Earnings Applicable to Common Shareholders
Liquids Pipelines			68.6				53.6				134.9				106.6
Gas Pipelines			15.9				18.7				31.9				37.0
Sponsored Investments			23.2				14.5				43.4				32.9
Gas Distribution and Services			34.0				2.9				120.0				130.7
International			21.3				20.4				43.1				38.6
Corporate			(5.1	)			(16.5	)			(24.5	)			(31.6	)
			157.9				93.6				348.8				314.2
Cash Flow Data
Cash provided by operating activities before changes in operating assets and liabilities			253.9				295.9				577.5				664.8
Cash provided by operating activities			477.2				351.6				1,191.7				1,021.2
Expenditures on property, plant and equipment			231.9				116.4				392.6				199.5
Acquisitions and long-term investments			0.2				16.2				156.3				119.9
Common share dividends			100.8				86.9				201.4				173.8
Per Share Information
Earnings per Common Share			0.47				0.27				1.03				0.93
Diluted Earnings per Common Share			0.46				0.27				1.02				0.92
Dividends per Common Share			0.2875				0.2500				0.5750				0.5000
Shares Outstanding (millions)
Weighted Average Common Shares Outstanding											339.3				336.9
Diluted Weighted Average Common Shares Outstanding											342.5				340.2
Operating
Liquids Pipelines1
Deliveries (thousands of barrels per day)			2,054				1,999				2,103				2,015
Barrel miles (billions)			186				173				384				345
Average haul (miles)			997				951				1,010				945
Gas Pipelines — Average Daily Throughput Volume (millions of cubic feet per day)
Alliance Pipeline US			1,592				1,561				1,636				1,622
Vector Pipeline			1,011				979				1,082				1,036
Enbridge Offshore Pipelines			2,229				2,435				2,149				2,520
Gas Distribution and Services2
Volumes (billion cubic feet)			70				75				240				264
Number of active customers (thousands)			1,825				1,779				1,825				1,779
Degree day deficiency3
Actual			439				487				2,105				2,453
Forecast based on normal weather			546				546				2,440				2,440

ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF EARNINGS

			Three months ended								Six months ended
			June 30,								June 30,
(unaudited; millions of Canadian dollars, except per share amounts)		2006				2005				2006				2005
Revenues
Commodity sales			1,791.1				1,035.1				4,496.5				2,966.0
Transportation			478.3				463.1				1,062.2				1,008.6
Energy services			57.8				74.2				115.2				153.6
			2,327.2				1,572.4				5,673.9				4,128.2
Expenses
Commodity costs			1,695.6				943.2				4,287.6				2,713.0
Operating and administrative			248.9				255.2				503.3				514.6
Depreciation and amortization			146.2				143.0				292.2				286.3
			2,090.7				1,341.4				5,083.1				3,513.9
			236.5				231.0				590.8				614.3
Income from Equity Investments			43.3				23.0				98.1				68.8
Other Investment Income			2.9				17.6				17.0				54.0
Interest Expense			(136.8	)			(134.1	)			(275.1	)			(269.4	)
			145.9				137.5				430.8				467.7
Income Taxes			13.7				(42.2	)			(78.6	)			(150.1	)
Earnings			159.6				95.3				352.2				317.6
Preferred Share Dividends			(1.7	)			(1.7	)			(3.4	)			(3.4	)
Earnings Applicable to Common Shareholders			157.9				93.6				348.8				314.2
Earnings Per Common Share			0.47				0.27				1.03				0.93
Diluted Earnings Per Common Share			0.46				0.27				1.02				0.92

ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

			Six months ended
(unaudited; millions of Canadian dollars)			June 30,
		2006				2005
Retained Earnings at Beginning of Period			2,098.2				1,840.9
Earnings Applicable to Common Shareholders			348.8				314.2
Common Share Dividends			(201.4	)			(173.8	)
Dividends Paid to Reciprocal Shareholder			6.1				5.4
Dividend Reclassification Adjustment			—				51.2
Retained Earnings at End of Period			2,251.7				2,037.9

ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three month ended								Six month ended
			June 30,								June 30,
(unaudited; millions of Canadian dollars)		2006				2005				2006				2005
Cash Provided By Operating Activities
Earnings			159.6				95.3				352.2				317.6
Depreciation and amortization			146.2				143.0				292.2				286.3
Equity earnings less than/(in excess of) cash distributions			(8.2	)			6.7				(42.8	)			(21.5	)
Gain on reduction of ownership interest			—				—				—				(15.6	)
Future income taxes			(49.7	)			47.9				(48.1	)			85.0
Other			6.0				3.0				24.0				13.0
Changes in operating assets and liabilities			223.3				55.7				614.2				356.4
			477.2				351.6				1,191.7				1,021.2
Investing Activities
Acquisitions			—				(15.4	)			(101.4	)			(58.1	)
Long-term investments			(0.2	)			(0.8	)			(54.9	)			(61.8	)
Additions to property, plant and equipment			(239.1	)			(116.4	)			(392.6	)			(199.5	)
Change in construction payable			6.6				(14.3	)			(14.3	)			(0.3	)
Change in long-term notes receivable			28.0				(0.6	)			28.0				(0.6	)
			(204.7	)			(147.5	)			(535.2	)			(320.3	)
Financing Activities
Net change in short-term borrowings and short-term debt			214.4				(8.6	)			(553.2	)			(709.8	)
Net change in non-recourse short-term debt of joint ventures			4.5				12.5				4.5				11.9
Long-term debt issues			—				—				500.0				620.1
Long-term debt repayments			(400.0	)			(100.0	)			(400.0	)			(396.9	)
Non-recourse long-term debt repaid by joint ventures			(27.1	)			(48.1	)			(29.7	)			(52.4	)
Non-recourse long-term debt issued by joint ventures			0.8				—				2.8				6.8
Changes in non-controlling interests			(13.8	)			(7.4	)			(19.9	)			(11.9	)
Common shares issued			18.4				12.0				38.5				39.4
Preferred share dividends			(1.7	)			(1.7	)			(3.4	)			(3.4	)
Common share dividends			(100.8	)			(86.9	)			(201.4	)			(173.8	)
			(305.3	)			(228.2	)			(661.8	)			(670.0	)
Increase/(Decrease) in Cash and Cash Equivalents			(32.8	)			(24.1	)			(5.3	)			30.9
Cash and Cash Equivalents at Beginning of Period			181.4				160.5				153.9				105.5
Cash and Cash Equivalents at End of Period			148.6				136.4				148.6				136.4

ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		June 30,				December 31,
(unaudited; millions of Canadian dollars)		2006				2005
Assets
Current Assets
Cash and cash equivalents			148.6				153.9
Accounts receivable and other			1,709.9				1,900.3
Inventory			597.4				1,021.4
			2,455.9				3,075.6
Property, Plant and Equipment, net			10,590.0				10,466.6
Long-Term Investments			1,877.8				1,842.8
Receivable from Affiliate			147.0				177.0
Deferred Amounts and Other Assets			929.9				894.2
Intangible Assets			241.4				252.6
Goodwill			391.5				367.2
Future Income Taxes			160.8				134.9
			16,794.3				17,210.9
Liabilities and Shareholders’ Equity
Current Liabilities
Short-term borrowings			192.4				1,074.8
Accounts payable and other			1,630.6				1,624.8
Interest payable			84.3				81.7
Current maturities and short-term debt			331.2				401.2
Current portion of non-recourse long-term debt			57.7				68.2
			2,296.2				3,250.7
Long-Term Debt			6,745.2				6,279.1
Non-Recourse Long-Term Debt			1,576.4				1,619.9
Other Long-Term Liabilities			81.3				91.7
Future Income Taxes			991.0				1,009.0
Non-Controlling Interests			687.8				691.0
			12,377.9				12,941.4
Shareholders’ Equity
Share capital
Preferred shares			125.0				125.0
Common shares			2,388.3				2,343.8
Contributed surplus			12.3				10.0
Retained earnings			2,251.7				2,098.2
Foreign currency translation adjustment			(225.2	)			(171.8	)
Reciprocal shareholding			(135.7	)			(135.7	)
			4,416.4				4,269.5
			16,794.3				17,210.9

SEGMENTED INFORMATION

Three months ended June 30, 2006

														Gas
		Liquids				Gas				Sponsored				Distribution
(millions of Canadian dollars)		Pipelines				Pipelines				Investments				and Services				International				Corporate				Consolidated
Revenues			246.1				86.4				63.4				1,928.5				2.8				—				2,327.2
Commodity costs			—				—				—				(1,695.6	)			—				—				(1,695.6	)
Operating and administrative			(85.2	)			(24.7	)			(18.0	)			(113.5	)			(4.6	)			(2.9	)			(248.9	)
Depreciation and amortization			(40.1	)			(20.4	)			(17.9	)			(66.4	)			(0.1	)			(1.3	)			(146.2	)
			120.8				41.3				27.5				53.0				(1.9	)			(4.2	)			236.5
Investment and other income			0.2				3.2				5.6				11.3				27.7				(1.8	)			46.2
Interest and preferred share dividends			(27.6	)			(18.5	)			(15.0	)			(46.1	)			—				(31.3	)			(138.5	)
Income taxes			(24.8	)			(10.1	)			5.1				15.8				(4.5	)			32.2				13.7
Earnings applicable to common shareholders			68.6				15.9				23.2				34.0				21.3				(5.1	)			157.9

Three months ended June 30, 2005

														Gas
		Liquids				Gas				Sponsored				Distribution
(millions of Canadian dollars)		Pipelines				Pipelines				Investments				and Services				International				Corporate				Consolidated
Revenues			214.1				98.3				61.7				1,196.3				2.0				—				1,572.4
Commodity costs			—				—				—				(943.2	)			—				—				(943.2	)
Operating and administrative			(77.0	)			(23.1	)			(14.9	)			(133.8	)			(3.5	)			(2.9	)			(255.2	)
Depreciation and amortization			(36.5	)			(23.9	)			(17.9	)			(62.5	)			(0.3	)			(1.9	)			(143.0	)
			100.6				51.3				28.9				56.8				(1.8	)			(4.8	)			231.0
Investment and other income			(0.4	)			1.3				10.1				(1.4	)			22.8				8.2				40.6
Interest and preferred share dividends			(24.2	)			(21.6	)			(15.8	)			(42.6	)			—				(31.6	)			(135.8	)
Income taxes			(22.4	)			(12.3	)			(8.7	)			(9.9	)			(0.6	)			11.7				(42.2	)
Earnings applicable to common shareholders			53.6				18.7				14.5				2.9				20.4				(16.5	)			93.6

Six months ended June 30, 2006

														Gas
		Liquids				Gas				Sponsored				Distribution
(millions of Canadian dollars)		Pipelines				Pipelines				Investments				and Services				International				Corporate				Consolidated
Revenues			493.9				173.1				125.4				4,876.2				5.3				—				5,673.9
Commodity costs			—				—				—				(4,287.6	)			—				—				(4,287.6	)
Operating and administrative			(170.0	)			(47.1	)			(32.9	)			(238.9	)			(7.8	)			(6.6	)			(503.3	)
Depreciation and amortization			(78.7	)			(42.4	)			(36.0	)			(132.1	)			(0.4	)			(2.6	)			(292.2	)
			245.2				83.6				56.5				217.6				(2.9	)			(9.2	)			590.8
Investment and other income			—				6.0				25.9				25.7				52.1				5.4				115.1
Interest and preferred share dividends			(50.8	)			(37.3	)			(30.0	)			(94.8	)			—				(65.6	)			(278.5	)
Income taxes			(59.5	)			(20.4	)			(9.0	)			(28.5	)			(6.1	)			44.9				(78.6	)
Earnings applicable to common shareholders			134.9				31.9				43.4				120.0				43.1				(24.5	)			348.8

Six months ended June 30, 2005

														Gas
		Liquids				Gas				Sponsored				Distribution
(millions of Canadian dollars)		Pipelines				Pipelines				Investments				and Services				International				Corporate				Consolidated
Revenues			425.9				194.8				122.0				3,380.0				5.5				—				4,128.2
Commodity costs			—				—				—				(2,713.0	)			—				—				(2,713.0	)
Operating and administrative			(151.2	)			(44.3	)			(28.1	)			(274.0	)			(8.1	)			(8.9	)			(514.6	)
Depreciation and amortization			(73.7	)			(48.1	)			(35.4	)			(125.6	)			(0.6	)			(2.9	)			(286.3	)
			201.0				102.4				58.5				267.4				(3.2	)			(11.8	)			614.3
Investment and other income			(1.2	)			1.3				30.8				25.2				42.9				23.8				122.8
Interest and preferred share dividends			(48.5	)			(42.7	)			(31.3	)			(87.3	)			—				(63.0	)			(272.8	)
Income taxes			(44.7	)			(24.0	)			(25.1	)			(74.6	)			(1.1	)			19.4				(150.1	)
Earnings applicable to common shareholders			106.6				37.0				32.9				130.7				38.6				(31.6	)			314.2

Enbridge Inc.
Management’s Discussion & Analysis
For the Three and Six Months Ended June 30, 2006

This Management’s Discussion and Analysis, dated August 1, 2006 should be read in conjunction with the unaudited consolidated financial statements of Enbridge Inc. as at and for the three and six months ended June 30, 2006 and the Management’s Discussion and Analysis included in the Company’s 2005 Annual Report.

Consolidated Earnings

			Three months ended								Six months ended
(millions of Canadian dollars)			June 30,								June 30,
		2006				2005				2006				2005
Liquids Pipelines			68.6				53.6				134.9				106.6
Gas Pipelines			15.9				18.7				31.9				37.0
Sponsored Investments			23.2				14.5				43.4				32.9
Gas Distribution and Services			34.0				2.9				120.0				130.7
International			21.3				20.4				43.1				38.6
Corporate			(5.1	)			(16.5	)			(24.5	)			(31.6	)
			157.9				93.6				348.8				314.2

Earnings applicable to common shareholders were $348.8 million for the six months ended June 30, 2006, or $1.03 per share, compared with $314.2 million or $0.93 per share in 2005. The $34.6 million increase in earnings was attributed to strong performance from the Enbridge crude oil mainline system and $48.9 million from the revaluation of future income tax balances due to tax rate reductions. These positive factors were partially offset by a lower contribution from the gas distribution utility, as weather in the Ontario market area was significantly warmer than normal.

Earnings applicable to common shareholders were $157.9 million for the three months ended June 30, 2006, or $0.47 per share, compared with $93.6 million, or $0.27 per share in 2005. The $64.3 million increase in earnings reflected similar factors as those identified in the six month analysis except the weather impact at the gas distribution utility is less significant as the second quarter is seasonally a quarter in which lower volumes are distributed.

FORWARD LOOKING INFORMATION

Certain information provided in this Management’s Discussion and Analysis (MD&A) constitutes forward-looking statements. The words “anticipate”, “expect”, “project”, “estimate”, “forecast” and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Except to the extent required by applicable securities laws and regulations, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Significant after-tax non-operating factors and variances affecting consolidated earnings were as follows:

			Three months ended								Six months ended
(millions of Canadian dollars)			June 30,								June 30,
		2006				2005				2006				2005
Sponsored Investments
Dilution gain on EEP unit issuance			—				—				—				4.6
EEP non-cash derivative fair value gains/(losses)			(0.3	)			—				2.4				—
Revalue future income taxes due to tax rate changes			6.0				—				6.0				—
Gas Distribution and Services
Colder/(warmer) than normal weather affecting EGD			(9.4	)			(2.0	)			(30.7	)			1.7
Dilution gain in Noverco (Gaz Metro unit issuance)			—				—				—				7.3
Revalue future income taxes due to tax rate changes			28.9				—				28.9				—
Corporate
Revalue future income taxes due to tax rate changes			14.0				—				14.0				—
Total significant after-tax non-operating factors and variances increasing/(decreasing) earnings			39.2				(2.0	)			20.6				13.6

Significant operating factors affecting consolidated earnings in 2006 included the following:

•

Enbridge crude oil mainline system earnings were higher primarily due to lower oil losses, higher earnings from Terrace and the Incentive Tolling Settlement (ITS).

•

Enbridge Energy Partners (EEP) earnings have increased significantly with higher crude oil throughput, strong margins and higher volumes in the natural gas gathering and processing businesses.

•

Corporate costs increased as certain floating interest rate financings were replaced with longer term fixed rate debt.

The Company has foreign currency denominated earnings, primarily from U.S. based operations and investments, as well as its Euro investment in CLH. The Company uses long-term derivative contracts to economically hedge a significant portion of the cash distributions from these long-term investments. However, this does not eliminate the GAAP earnings volatility caused by exchange rate differences. During the first half of 2006, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in $9.8 million (2005 — $5.4 million) of incremental cash flows, which was not included in reported earnings.

RECENT DEVELOPMENTS

Liquids Pipelines — Progress on Organic Growth Projects

The Liquids Pipelines strategy focuses on meeting the needs of Western Canadian crude oil producers. This strategy includes continuing to develop Alberta oil sands infrastructure, enhancing producer access to diluent and increasing traditional PADD II (U.S. Midwest) market penetration. The Company advanced these objectives during the first half of 2006 by initiating the Southern Lights Pipeline project, advancing the Southern Access Expansion and Extension projects, developing the Hardisty Terminal project and completing the reversal of Spearhead Pipeline.

Southern Lights Pipeline

In response to interest expressed by a number of shippers to increase the availability of diluent in Western Canada, Enbridge announced plans to build the Southern Lights Pipeline. This 180,000 barrel per day (bpd) pipeline would transport diluent from Chicago to Edmonton. Diluent is required to transport heavy oil and bitumen produced in Alberta. In July 2006, Enbridge received shipper

commitments exceeding the planned capacity of the Southern Lights Pipeline. This pipeline is expected to be in service in early 2009.

The Southern Lights Pipeline project is expected to cost approximately US$920 million (in 2006 dollars) and will include constructing a new 16 or 20-inch diameter pipe from Chicago to Clearbrook, Minnesota and reversing the flow of Enbridge’s Line 13, an existing crude oil pipeline, from Clearbrook to Edmonton. Enbridge will also construct a new 20 or 24-inch pipeline to transport crude oil from Cromer, Manitoba to Clearbrook and expand its existing Line 2. These changes to the existing crude oil system will increase southbound light crude system capacity by 45,000 bpd.

The approval of the Board of Directors of EEP is required to exchange the portion of Line 13 currently owned by EEP for a portion of the Cromer to Clearbrook crude oil pipeline to be constructed. In addition, a final decision to proceed with the project will require support from crude oil shippers for the required reconfiguration of the mainline system, as well as the successful completion of engineering, environmental permitting, public consultation and regulatory approvals.

Southern Access Extension

Enbridge is proceeding, with the formal support of shippers and the Canadian Association of Petroleum Producers (CAPP), with the expedited construction of the Southern Access Extension from Flanagan, Illinois to Patoka, Illinois. The Southern Access Extension involves a new 36-inch diameter, 400,000 bpd pipeline at a cost of approximately US$350 million and is targeted to be in service in 2009. Construction of the new line is subject to regulatory approvals.

Southern Access Mainline Expansion

During the first quarter of 2006, the U.S. Federal Energy Regulatory Commission approved an Offer of Settlement with respect to tolls for the U.S. segment of the Southern Access Expansion. The Settlement allows the Lakehead System, the portion of the mainline owned by EEP in the United States, to recover the costs associated with Southern Access Expansion through a surcharge in addition to existing base rates. The surcharge will be a transparent cost-of-service-based tariff mechanism that EEP will adjust each year to actual costs and throughput.

In the second quarter of 2006, Enbridge and EEP reached agreement with shippers and CAPP to increase the proposed diameter of the Southern Access Expansion between Superior, Wisconsin and Flanagan, Illinois to a 42-inch diameter, increasing the estimated capital cost of the Southern Access Expansion to approximately US$1.3 billion (in 2005 dollars). The pipe diameter increase, in conjunction with the proposed Alberta Clipper Pipeline, will position the system for low-cost future expansion. The first phase of the Canadian mainline expansion project has been expedited and is now expected to add approximately 120,000 bpd of capacity by the end of 2006, rather than 2007. Subsequent phases are expected to increase the cumulative additional capacity to 190,000 bpd in 2008 and 400,000 bpd in 2009.

Alberta Clipper Pipeline

Shipper interest in the proposed 400,000 bpd Alberta Clipper Pipeline continues to be strong. Enbridge and EEP will seek to reach agreement with shippers on the project terms in time to permit the filing of regulatory applications before the end of 2006, to maintain the option to achieve an in-service date in the fourth quarter of 2009. The proposed Alberta Clipper Pipeline would involve the construction of a 36-inch diameter heavy crude line from Hardisty, Alberta to Superior, Wisconsin, in conjunction with additional pumping power applied to the new 42-inch pipe from Superior to Flanagan, Illinois, described above under Southern Access Extension. The Canadian segment of the line is expected to cost $1,375 million (in 2006 dollars) and the U.S. segment, which would be undertaken by EEP, is expected to cost US$700 million (in 2006 dollars).

Gateway Pipeline Project

Enbridge is continuing to work towards obtaining volume commitments and transportation agreements with shippers for the Gateway Pipeline Project. This project includes a 400,000 bpd petroleum export line which would transport oil from the Edmonton, Alberta area to Kitimat, B.C. where it could be shipped by tanker to China, other Asia-Pacific markets and California. The project also includes a condensate import line, which would bring imported condensate from Kitimat, B.C. to the Edmonton, Alberta area. Interest expressed by shippers has resulted in upsizing the petroleum export line to from 30 to 36 inches. The size of the condensate import line has also been increased from 16 to 20 inches. In several cases the execution of the agreements is pending a final decision by the shipper on an oil sands project. The in service date preference of the shippers spans 2010 and 2011 based on the timing of their projects.

Hardisty Terminal

During the second quarter of 2006, the Company announced its plan to proceed with the construction of a new crude oil terminal at Hardisty, Alberta. The terminal is expected to have an initial capacity of 5 million barrels and will cost approximately $250 million. The Company has executed contracts for 80% of the initial capacity and has entered into letters of intent representing the balance of the initial capacity. The Company is in active discussions with additional parties whose interest would support a second phase expansion. The facility is anticipated to start to come into service in December 2007, with tanks being commissioned throughout 2008.

Waupisoo Pipeline

The Waupisoo Pipeline project continues to progress as the $400 million (in 2005 dollars) crude oil line is in the Alberta regulatory review process. The previously announced diluent line has been separated from the regulatory filing in order to expedite the crude oil line, which is needed earlier. Enbridge will continue discussions with all interested parties for a diluent line, with construction and an in-service date to be determined at a later date.

Spearhead Pipeline

During March 2006, Spearhead Pipeline commenced delivery of crude oil from Chicago to Cushing, Oklahoma. The initial capacity of Spearhead Pipeline is 125,000 bpd and it can be expanded to 190,000 bpd in the near term. Current volumes of approximately 75,000 bpd have exceeded the Company’s first year expectations.

Other Development Initiatives

The Company routinely considers many potential development initiatives designed to provide shippers with access to diverse markets and meet growing demand for pipeline capacity from the Alberta oil sands. In addition to the Gateway Pipeline project to the west coast and the Alberta Clipper Pipeline project, which could provide large incremental export capacity, the Company has had discussions with customers who have expressed an interest in taking capacity on a new $3.6 billion, 400,000 bpd pipeline, which could transport oil from Alberta directly to Texas. This pipeline would also connect to refining centers in Denver, Colorado and Cushing, Oklahoma. The development of a number of alternative initiatives allows shippers to choose the projects that best meet their needs. Enbridge will only proceed with projects supported by shippers.

Gas Pipelines — Offshore Developments

One of the Company’s Gas Pipelines’ strategies is to capitalize on its offshore Gulf of Mexico assets (Enbridge Offshore Pipelines) through the connection of new gas discoveries and acquisition of other deepwater systems. During the second quarter of 2006, Enbridge made progress on this objective by acquiring, through a 50%-owned joint venture, a 14-mile offshore pipeline, with a capacity of 200 million cubic feet per day (mmcf/d), to transport natural gas from the West Cameron area to its jointly owned Stingray Pipeline.

Shenzi Lateral Project

Enbridge also announced plans to construct a natural gas lateral to connect the new deepwater Shenzi field to existing Gulf of Mexico pipelines. The 11-mile lateral is expected to cost approximately US$45 million and to have a capacity of 100 mmcf/d. The Shenzi lateral would deliver natural gas through the Company’s 22%-owned Cleopatra Pipeline, the 50%-owned Manta Ray Pipeline and the 50%-owned Nautilus Pipeline and is expected to be completed by the end of 2007 with the first gas expected by mid-year 2009. Construction is scheduled in the second half of 2007 to secure the commitment of a lay vessel, which are in high demand, and avoid interference with the producers’ development construction in 2008.

Neptune Project

Construction of the US$125 million natural gas and crude oil laterals, which will connect the deepwater Neptune oil and gas field to existing Gulf of Mexico pipelines is now expected to begin as early as November of this year with sub-sea tie-ins scheduled for the second quarter of 2007.

Project Updates — Power Generation

Construction of the 200-megawatt Ontario wind power project on the eastern shore of Lake Huron is now scheduled to begin in late 2006 with start up expected in the fall of 2007.

Enbridge will not be participating as a partner in the Goreway Power Project. However, EGD has received approval from the OEB to construct a pipeline to service this facility. The Company will continue to explore gas-fired generation opportunities that are supported by long-term contracts and improve the utilization of existing assets.

Enbridge Gas Distribution (EGD) — Late Payment Penalties Class Action Proceeding

In July 2006, culminating a 12-year legal case, EGD entered into a settlement agreement with respect to the repayment of a portion of amounts paid to it as late payment penalties. The total amount of late payment penalties billed between April 1994 and February 2002, when the late payment penalty was revised, was approximately $74 million.

Under the settlement agreement, which must be approved by the Ontario Superior Court of Justice, EGD would donate $9 million to the Winter Warmth Fund, pay class counsel approximately $10 million for the plaintiff’s legal fees and expenses and pay approximately $2 million to the Class Proceedings Fund. The Winter Warmth Fund provides eligible low-income customers of participating Ontario utilities with financial assistance for the payment of their natural gas and electricity bills.

The settlement agreement is subject to the approval of the Ontario Superior Court of Justice (the Court). The Court will consider the settlement at a hearing likely to be held in September 2006. If the Court does not approve the settlement, the settlement agreement will become null and void, the proposed payments will not be made by the Company and the litigation will likely continue. EGD intends to apply to the Ontario Energy Board (OEB) for recovery of payments resulting from the settlement and has booked a total liability of approximately $21 million with an offsetting receivable from ratepayers.

EGD — Final 2006 Rates Decision

On February 9, 2006, the OEB released its decision relating to EGD’s 2006 rate application. The new rates approved by the OEB’s decision result in an overall increase in rates of approximately 1% for the average residential customer. One key element of the decision included a capital expenditure budget of $300 million, compared with EGD’s request for capital expenditures of approximately $460 million. Average annual capital expenditures incurred over the past five years have been approximately $250 million per year.

The key elements of the OEB’s decision are summarized below.

Approved for 2006
Rate base (millions)		$	3,633.6
Deemed common equity for regulatory purposes			35.00	%
Rate of return on common equity			8.74	%

EGD expects to file its 2007 rate application with the OEB during the third quarter of 2006.

OUTLOOK

Hurricane Update
Enbridge Offshore Pipelines natural gas volumes increased in the second quarter of 2006, recovering to 2005 pre-hurricane levels. This is the result of previously damaged infrastructure and associated production coming back on line and additional producer volumes committed to the systems, offsetting natural reservoir declines.

Repairs to producer-owned upstream facilities on the Mississippi Canyon corridor were completed at the end of the second quarter. Repairs in the Stingray corridor are substantially complete onshore and are anticipated to be completed offshore in the third quarter. Insurance coverage partially mitigated the temporary volume losses experienced as volumes returned to pre-hurricane levels.

The Company continues to maintain an active risk management program that includes comprehensive insurance coverage, notwithstanding a constrained insurance market. However, it is anticipated that related costs will increase in the form of higher insurance premiums and deductibles as well as longer waiting periods for business interruption claims. It is expected that the incidence and severity of windstorm occurrences, and the Company’s direct experience in the Gulf of Mexico, will dictate future costs and coverage levels in this region.

FINANCIAL RESULTS

Liquids Pipelines
Earnings

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Enbridge System			48.9				39.5				100.9				78.4
Athabasca System			13.8				11.4				26.1				23.7
Spearhead Pipeline			2.4				(0.1	)			2.7				(0.6	)
Olympic Pipeline			2.0				—				2.6				—
NW System			1.6				1.9				2.6				3.7
Feeder Pipelines and Other			(0.1	)			0.9				—				1.4
			68.6				53.6				134.9				106.6

Earnings from Liquids Pipelines for the six months ended June 30, 2006 increased to $134.9 million from $106.6 million for the prior year. The increase primarily reflected improved earnings from Enbridge System as well as the commencement of commercial operations on Spearhead Pipeline, in early March 2006, and the acquisition of Olympic Pipeline, in February 2006.

The Enbridge System reflected higher earnings from a number of factors including lower oil losses, performance incentives under the ITS and, within Terrace, lower taxes, higher toll revenues and the impact of higher volumes on the surcharge revenue.

Athabasca System earnings continued to grow as infrastructure additions contributed positively, but were partially offset by higher operating expenses.

Earnings for the three months ended June 30, 2006 were $68.6 million compared with $53.6 million for the three months ended June 30, 2005. The increase was due to improved earnings from Enbridge System and Athabasca System as well as contributions from Spearhead Pipeline and Olympic Pipeline.

Gas Pipelines
Earnings

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Alliance Pipeline US			7.2				8.5				14.5				16.4
Vector Pipeline			2.7				3.6				6.8				8.0
Enbridge Offshore Pipelines			6.0				6.6				10.6				12.6
			15.9				18.7				31.9				37.0

Earnings from Gas Pipelines were $31.9 million for the six months ended June 30, 2006, a decrease of $5.1 million from the same period in the prior year. The decrease was due mainly to the impact of the stronger Canadian dollar.

Alliance Pipeline US earnings were lower due to the stronger Canadian dollar in the first half of 2006 in comparison with the first half of 2005.

Vector Pipeline earnings were also impacted by the stronger Canadian dollar and higher operating costs in the second quarter of 2006 due to scheduled integrity inspections required by the regulator within the first six years of operation.

Enbridge Offshore Pipelines earnings are lower than the prior year; however, volumes returned to pre-hurricane levels during the second quarter of 2006. The stronger Canadian dollar also reduced earnings.

For the three months ended June 30, 2006, Gas Pipelines earned $15.9 million compared with $18.7 million for the three months ended June 30, 2005. The decrease reflected a stronger Canadian dollar, compared with the same period in the prior year.

Sponsored Investments
Earnings

		Three months ended								Six months ended
(millions of Canadian dollars)		June 30,								June 30,
		2006				2005				2006				2005
Enbridge Income Fund (EIF)			8.7				8.4				18.0				16.7
Enbridge Energy Partners (EEP)			8.5				6.1				19.4				11.6
Dilution gains in EEP			—				—				—				4.6
Revalue future income taxes due to tax rate changes			6.0				—				6.0				—
			23.2				14.5				43.4				32.9