Enbridge to Auction Mainline Shipping Rights After Regulatory Halt
(Reuters) — Enbridge Inc, said on Friday it plans to seek the Canada Energy Regulator’s approval to auction off rights to ship crude on its Mainline system, more than a month after the watchdog said the company will not be allowed to offer contracted space on the pipeline to shippers.
In a highly unusual move, the regulator halted the auction after major producers in the country protested Enbridge’s plans to switch to longer-term contracts from monthly allocation.
Enbridge, which also reported better-than-expected third quarter profit on Friday, said it expects to place the Canadian portion of the Line 3 replacement into service on Dec.1 after delays due to tribal and environmental challenges.
Line 3 is part of Enbridge’s Mainline network that transports western Canadian oil to Midwest refineries and the replacement project would double capacity to 760,000 barrels per day, providing much-needed relief from congestion on existing Canadian pipelines.
The company had earlier reached a deal with crude shippers for an additional charge till the U.S. portion of the Line 3 oil pipeline is completed.
The company also said on Friday it expects several of its growth projects to be operational in 2019, including the $700-million Gray Oak pipeline - the biggest of three new pipelines connecting the U.S. Permian basin to the Texas Gulf Coast.
Canada’s oil producers are desperate for new export pipelines as rising production and tight capacity on existing pipelines and rail have led to the Alberta government curtailing output.
The company’s adjusted profit of 56 Canadian cents per share in the third quarter, beat analysts estimate of 52 Canadian cents as it moved 5% more crude on its Mainline system.
Net income attributable to common shareholders was C$949 million ($719.43 million), or 47 Canadian cents per share, in the three months ended Sept. 30, compared with a loss of C$90 million, or 5 Canadian cents per share, a year earlier.
The year-ago quarter included some charges, including a non-cash expense of C$1.02 billion.
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