Enbridge to decide on controversial pipeline in second half of 2016

(Reuters) - Enbridge Inc ENB.TOENB.N said it expected to make a decision on whether to go ahead with the controversial Northern Gateway pipeline in the latter half of 2016, though it could not commit to a timeline.

Al Monaco, President and CEO, Enbridge, stands when introduced during the Enbridge Income Fund annual general meeting for shareholders in Toronto May 6, 2015. REUTERS/Peter Power

The newly formed Canadian government under Justin Trudeau has announced a ban on tanker traffic along the north coast of British Columbia, effectively slamming the door on Enbridge’s C$7.9 billion ($5.92 billion) pipeline.

The pipeline has also faced opposition from environmentalists and Aboriginal groups who fear it will worsen climate change, besides concerns about the risk of a spill.

Chief Executive Al Monaco, however, said on a conference call that the company was not giving up on the project, which would carry oil sands crude from near Edmonton, Alberta, to a deepwater port at Kitimat, British Columbia for export to Asian markets.

The company also raised its quarterly dividend to 53 Canadian cents per share from 46.5 Canadian cents and announced a five-year strategic plan, including a C$38 billion growth program.

The Calgary-based company’s shares closed down nearly 4 percent at C$45.82 on the Toronto Stock Exchange.

Enbridge also said on Thursday that its other pipeline, Line 9, is currently operational and would be generating revenue in December.

The company had earlier said a delay in starting Line 9, which ships crude from Ontario to Quebec, would hurt its 2015 adjusted earnings.

Enbridge, like TransCanada Corp TRP.TO, had cut 5 percent of its workforce in November, amid tumbling crude oil prices.

The company also said it expects 2016 adjusted earnings before interest and taxes in the range of C$4.4 billion to C$4.8 billion.

Enbridge sees 2016 average annual available cash flow from operations (ACFFO) to be in the range of C$3.80 to C$4.50 per share. For 2015, the company had estimated ACFFO of C$3.30 to C$4.00 per share.

The increase in cash flow range for 2016 reflects growth from existing businesses, including projects brought on stream this year such as the Mainline Expansion Program and the Edmonton-to-Hardisty Pipeline, the company said.

($1 = 1.3342 Canadian dollars)

Reporting by Shubhankar Chakravorty, Sneha Banerjee and Tanvi Mehta in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva