Enbridge Records $80 Million Loss This Quarter

Enbridge's plan to reverse the flow of its L9 pipeline running between southern Ontario and Montreal has been delayed.

Enbridge Inc. (TSX, NYSE:ENB), Canada’s largest pipeline operator, swung to a third-quarter loss, but its adjusted earnings beat estimates, despite announcing its plan to reverse the flow of a pipeline running between southern Ontario and Montreal has been delayed.

While National Energy Board (NEB) approved the project subject to conditions in March, Enbridge said the board has requested additional information related to one of the conditions.

In a sharply worded letter to Enbridge in early October, NEB secretary Sheri Young said the board is not convinced the company has met the safety conditions, which the regulator set when it approved the plan to reverse the pipeline’s direction of flow. It also said Enbridge was not allowed to begin shipping crude until it addresses those concerns.

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Specifically, the authority has asked Enbridge to identify all major water bodies that its pipeline will cross and outline measures it will take to ensure that there are safety shut-off valves within a kilometre on both sides of where the pipeline crosses.

Enbridge’s Line 9, built in 1976, originally shipped oil from Sarnia, Ont., to Montreal, but was reversed in the late 90s in response to market conditions to pump imported crude westward. The company wants to switch the direction back.

“Our objective with the Line 9B project has always been to meet, if not exceed, regulatory requirements and to assure our stakeholders of our commitment to operate our pipeline safely and protect the environment,” Enbridge president and chief executive Al Monaco said in a statement.

“We have responded to the board’s request for clarification of our approach and additional information. We continue to work with the Board to understand and respond to its questions and to meet its requirements.”

Source: Enbridge.

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The pipeline giant said its $ 80 million net loss for the quarter amounted to 10 cents per share for the quarter ended Sept. 30 compared with a profit of $421 million or 51 cents per share a year ago.

However, adjusted earnings, which excluded unrealized derivative gains and losses and other one-time items, amounted to $345 million or 41 cents per share, up from $278 million or 34 cents per share a year ago.

Average deliveries rose on all of the company's liquids pipeline systems, driven by a nearly 18 percent jump in volumes on its Canadian Mainline pipeline system.

By Cecilia Jamasmie

Source – www.mining.com

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