(Adds CEO comment on re-exports of Canadian crude)
By Julie Gordon
VANCOUVER May 7 Enbridge Inc ,
Canada's largest pipeline company, said on Wednesday its
Flanagan South and Seaway expansion projects in the United
States aimed at more than doubling capacity to Gulf Coast
refineries were on track to begin operating in the next few
Also on Wednesday, Enbridge reported its adjusted quarterly
earnings fell slightly, but still beat estimates, as higher
deliveries were offset by lower tolls and a lack of revenue from
Line 9B in Ontario, which is being reversed.
"It was a fairly vanilla quarter and that's a good thing for
a pipeline company," said David McColl, an energy analyst with
Morningstar. "I think all eyes are still really focused on the
latter half of the year when Flanagan and Seaway are going to
Construction of Flanagan South, a new line from Pontiac,
Illinois, to Cushing, Oklahoma, was nearly complete and expected
to be online in the third quarter, Al Monaco, Enbridge's chief
executive officer, told investors on a conference call.
Its other near-term project, the Seaway expansion and
twinning, should be completed "in the next couple of months," he
said, boosting the Cushing to Freeport, Texas, line to 850,000
barrels per day from 400,000. Seaway is a joint venture with
Enterprise Products Partners LP.
The company reaffirmed that it expected to have approval
from the Obama administration for its Alberta Clipper pipeline
expansion project in time to reach full capacity of 800,000 bpd
by the third quarter of 2015. The Alberta Clipper line extends
from Hardisty, Alberta, to Superior, Wisconsin.
With much of its growth set to happen over the next five
years, Enbridge said it was looking at new opportunities in
renewable energy generation, midstream natural gas
infrastructure in western Canada and opportunities in Colombia,
Peru and Australia.
Last month the company became the first to confirm plans to
re-export Canadian crude from the United States.
Speaking to reporters after Enbridge's annual general
meeting in Calgary, Monaco declined to give details on possible
destinations or whether shipments had started, adding that
re-exports were a small part of Enbridge's business but
important to customers.
"What we are seeing in the marketplace is demand from our
customers to reach other markets. The Gulf Coast in particular
is inundated with more and more crude," Monaco said.
Net earnings, which benefited from after-tax gains on asset
disposals and non-recurring changes in derivative fair values,
rose to C$390 million ($358 million), or 47 Canadian cents per
share, from C$250 million, or 31 Canadian cents per share, a
Excluding one-time items, Enbridge earned 60 Canadian cents
per share, down from 62 Canadian cents in the first quarter of
2013 but slightly above analyst expectations of 57 Canadian
Average deliveries on the regional oil sands system,
comprising Athabasca mainline and Waupisoo pipeline, jumped 45
percent to 671,000 bpd. Deliveries on the Canadian Mainline
system rose about 7 percent to 1.9 million bpd.
Adjusted earnings from liquid pipelines fell marginally to
Enbridge shares closed up 32 Canadian cents at C$53.31 on
the Toronto Stock Exchange.
($1 = 1.0893 Canadian dollars)
(Additional reporting by Nia Williams in Calgary and Ashutosh
Pandey in Bangalore; Editing by Ted Kerr, Jeffrey Benkoe and