Reuters | Feb 14, 2020 12:07
(Reuters) - Enbridge Inc (TO:ENB) on Friday once again defended its decision to contract capacity on its Mainline system and said it would move forward with an open season to solicit bids if the pipeline operator wins necessary approval.
The company plans to sell 90% of space under long-term contracts to shippers on the nearly 3 million barrels-per-day (bpd) Mainline, instead of continuing the older practice of rationing space monthly.
With congested pipelines, some oil producers worry that Enbridge's changes will further limit access.
After two years of negotiations and changes to the contract, Enbridge has landed on a very good balance of benefits for everybody, including producers, integrated companies and refiners, Chief Executive Officer Al Monaco said on a conference call with analysts.
Earlier on Friday, Enbridge posted a quarterly profit that fell short of analysts' estimates, hit by weaker earnings at its energy services unit and liquids pipeline segment, sending its shares down more than 1%.
The energy services unit, which provides marketing services to North American refiners and producers among others, swung to a loss of C$22 million ($16.60 million).
Enbridge transported 1.6% more crude on its Mainline system during the fourth quarter ended Dec. 31, however adjusted core earnings from Canada's longest pipeline fell 3.7%.
The headline EBITDA miss may cause some concern given robust equity outperformance, however the company hit full-year guidance and attractive defensive characteristics remain apparent, wrote analysts at Tudor Pickering Holt & Co.
Pipeline operators in Canada have faced strong opposition from environmental and indigenous groups, which has stalled some new pipeline projects at a time when rising production is already pressurizing existing infrastructure.
Enbridge has been trying to get approvals for its Line 3 project that would replace an aging pipeline from Alberta to Superior, Wisconsin, allowing it to double capacity to 760,000 bpd.
The company said it still doesn't have clarity on when the permits will be issued but once it gets them, construction should take between six to nine months.
Excluding items, Enbridge earned 61 Canadian cents per share, below analysts' expectations of 63 Canadian cents per share, according to IBES data from Refinitiv.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.