Enbridge sees progress on Line 3 expansion and is adding more capacity for Canadian oil

Enbridge Inc. warned of potential cost overruns on the $9 billion ($6.8 billion) replacement and expansion of its Line 3 crude-oil pipeline, a key project for the Canadian energy industry that has been delayed for over a year by regulatory hurdles in Minnesota.

Regulators in the state are due to submit a revised environmental impact statement for the project by Dec. 9, and state permitting agencies are advancing their work as much as possible in parallel with that process, Calgary-based Enbridge said in its third-quarter earnings release Friday. Depending on the final in-service date, the cost may exceed its current estimates, though the company said it currently doesn’t anticipate material capital cost impacts.

Key Takeaways

Enbridge’s update on Line 3 may provide mild optimism for Canadian oil producers who are counting on the conduit to help clear a glut of crude that has built up and allow Alberta to end its mandatory crude-output cuts. The project already had been delayed for more than a year because of legal challenges and Minnesota permitting issues.

Aside from the Line 3 progress, Enbridge provided another small dose of hope for producers in its release. The company, North America’s largest pipeline company, said it’s on track to add about 100,000 barrels of daily oil-shipping capacity by optimizing its current system. That’s up from a forecast of about 85,000 barrels in its second-quarter release.

The company also showed investors it’s on track from an earnings perspective. Third-quarter earnings, excluding some items, were 56 Canadian cents a share, topping analysts’ 51-cent average estimate. Enbridge also said it expects its distributable cash flow for the year to exceed the midpoint of its guidance range


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