CALGARY — Enbridge Inc. is confident that its Line 3 oil pipeline replacement project will come into service by the end of the year in spite of a renewed challenge launched this week by the newly elected governor of Minnesota.
On Tuesday, Gov. Tim Walz announced that his commerce department would petition the state Public Utility Commission to reconsider its approval of Line 3 through Minnesota, prolonging a process begun by his predecessor.
The $9-billion project to export crude from Alberta to Superior, Wis., where it will connect with pipelines to the U.S. Gulf Coast, is needed by shippers, supported by parties along its route and will create jobs and pay millions in taxes to local governments, said Enbridge CEO Al Monaco on a conference call on Friday.
The project is designed to replace an aging pipeline and restore its original capacity of 760,000 barrels per day, an increase of about 370,000 bpd.
“Clearly, this pipeline is critical and it has massive support. With PUC approval, we’ve reached the final permitting and construction phase of the project,” said Monaco on the call to discuss fourth-quarter financial results.
“With regulators in all jurisdictions having now approved it, it’s full steam ahead on the remaining project execution phases.”
As long as permits are received in time to get construction crews into the field by June, the Calgary based company will be able to put the pipeline in service before the end of the year, said Guy Jarvis, president of liquids pipelines, on the call.
Previous challenges by the former governor were set aside by the state utilities commission.
A lack of export pipeline space was blamed for steep discounts in western Canadian oil prices last year, leading to production curtailments by the Alberta government that began Jan. 1.
Enbridge said Friday its Canadian Mainline system — the major oil export route for Canadian oil — shipped a record average of 2.68 million barrels per day in the fourth quarter, up from 2.59 million bpd in the same period of 2017.
Full oil and gas pipelines throughout its Canadian and U.S. network and the addition of new services led to fourth-quarter earnings that beat analyst expectations.
Adjusted net income for Canada’s largest pipeline operator was $1.17 billion or 65 cents per share in the last three months of 2018, beating analyst estimates of $1.12 billion or 62 cents per share as noted by Thomson Reuters Eikon.
A year ago, Enbridge reported adjusted earnings of $1.01 billion or 61 cents per share for the fourth quarter of 2017.
Results were enhanced by operating performance, optimization of deliveries on existing pipelines, synergies from the Spectra Energy acquisition and $7 billion of projects brought into service in 2018, it said.
The results reflected many of the same influences that led to midstream rival TransCanada Corp. reporting net income of $1.09 billion on Thursday, up from $861 million for the same quarter a year earlier.
Enbridge has a $16-billion inventory of projects which are scheduled to come into service between 2019 and 2023.
Companies in this article: (TSX:ENB, TSX:TRP)
Dan Healing, The Canadian Press