By August 3, 2017 Read More →

Line 3 pipeline costs higher due to regulatory delays, route changes

Line 3 pipeline

Enbridge says it expects its Line 3 pipeline to be operational by the second half of 2019. Enbridge photo.

Line 3 pipeline runs from Hardisty, AB to Superior, WI

In its 2017 second quarter report, Enbridge says regulatory delays and route modifications will boost the cost of the Line 3 pipeline replacement project.

The company also reported a lower-than-expected Q2 profit.

NAFTAEnbridge says the project that runs from Hardisty, Alberta to Superior, Wisconsin will now cost C$8.2 billion, 9 per cent higher than previously forecast.  The Line 3 replacement project will double the capacity of the existing line to 760,000 barrels per day (b/d) and is the largest project in the company’s history.

The company says the increased cost will be offset by lower operating costs and a stronger US dollar.  As well, the pipeline is on track to be in service for the second half of 2019.

Enbridge chief executive Al Monaco said on a conference call that permits for Line 3 had been obtained in Canada, North Dakota and Wisconsin, but the company is still awaiting regulatory approval from Minnesota, which is expected in the third quarter of this year.

Monaco says Enbridge is unlikely to be impacted by rival pipeline projects, including Keystone XL and Trans Mountain.

“In terms of attracting spot barrels, we would see us as being extremely competitive,” he said. “The other thing is, a lot of those refiners in the U.S. Midwest and Gulf Coast area like the diet of what we’re moving.”

Enbridge’s second quarter profit more than tripled and was boosted by the company’s $28 billion purchase of Spectra Energy Corp.  But, the company’s Q2 profit was negatively affected by outages and production disruptions in its liquids pipeline business.

The company expects increased production and throughput on its mainline system to help improve business over the rest of the year.

Net income attributable to shareholders increased to C$919 million, or 56 cents per share from C$310 million, or 33 cents per share this time last year.

Excluding one-time items, Enbridge earned 41 cents per share.  Analysts had anticipated an expected earnings of 48 cents per share, according to Thomson Reuters.



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