Enbridge sticking with Line 3 plans ahead of final Minnesota decision
Al Beesley, Senior Safety Coordinator, leans on some pipe while waiting for a press conference to start with Alberta Premier Rachel Notley during a tour of Enbridge's Line 3 pipeline replacement project in Hardisty Alta., on Thursday, Aug.10, 2017. (Jason Franson/THE CANADIAN PRESS)
Ian Bickis, The Canadian Press
Published Thursday, May 10, 2018 2:39PM EDT
CALGARY -- The head of Enbridge Inc. says he still believes the company will secure its preferred route for the replacement of the aging Line 3 pipeline despite a Minnesota judge recommending a different option.
"We believe our proposed route is the optimal solution here. We're optimistic that the PUC will see things the same way and will see the replacement of the Line 3 as currently designed when they hold their hearing later in June," said company CEO Al Monaco on an earnings conference call Thursday.
Administrative Law Judge Ann O'Reilly recommended in April that the company's replacement of the line follow the existing route, rather than a diverted, more southerly route proposed by Enbridge.
O'Reilly wrote that Enbridge has established that the project is needed, but that the negative consequences to Minnesota of the company's more southerly preferred route outweigh the benefits.
The commission isn't required to follow the judge's recommendation for its final decision expected in June, but the position formed through extensive hearings and filings is expected to weigh on any final outcome.
Guy Jarvis, Enbridge's vice president of liquids pipelines and major projects, said on the conference call that the company was not looking at alternatives ahead of the final decision.
"We're not spending any time looking at those options right now. When people talk about other options versus our preferred route and project, we evaluated all of those five years ago, and we determined that our project and our route was the most optimal solution for Minnesota."
The 1,767 kilometre Line 3 pipeline, which runs from Hardisty, Alta, to Enbridge's terminal in Superior, Wis., has a capacity of 760,000 barrels a day but pressure restrictions due to the condition of the pipeline has the company running it at 390,000 barrels a day. Enbridge estimates the cost of replacing most of the line at $5.3 billion for the Canadian stretch and US$2.9 billion for the U.S. portion.
The company's comments on Line 3 come a day after it announced major asset sales that would further focus the company as a pure regulated pipeline and utility model.
Enbridge said Wednesday it would gain nearly $3.2 billion by selling renewable power facilities and natural gas gathering and processing assets in the United States.
The company is selling the wind and solar assets in Europe and the U.S. to the Canada Pension Plan Investment Board in a $1.75 billion deal, and selling its Midcoast Operating LP to an affiliate of private equity firm ArcLight Capital Partners LLC for about $1.44 billion.
In its earnings out Thursday, Enbridge said first-quarter profit fell compared with a year ago as it was hit by a number of one-time charges.
The company said it earned $445 million or 26 cents per share for the three months ended March 31 compared with a profit of $638 million or 54 cents per share a year ago.
On an adjusted basis, Enbridge says it earned $1.38 billion or 82 cents per share for the quarter compared with $657 million or 57 cents per share in the first quarter of 2017.
Analysts had expected a profit of 66 cents per share for the quarter, according to Thomson Reuters.
Companies in this story: (TSX:ENB)