Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Hazloc Heaters
Hazloc Heaters

Enbridge shares jump after Minnesota regulators approve Line 3 pipeline route

English Español 简体中文 हिन्दी Português
These translations are done via Google Translate

CALGARY — Enbridge Inc. shares rose by more than seven per cent in Toronto on Friday morning after regulators in Minnesota substantially approved its preferred route through the state to upgrade its deteriorating Line 3 crude oil pipeline.

The stock spiked to $47.24 in early trading as word of the routing decision was added to news Thursday that state commissioners had recognized the need for the pipeline, despite vocal opposition from local Indigenous and environmental activists.

Analysts say the approvals remove a negative overhang on Enbridge’s business plan as the project is the largest part of its $22-billion capital growth program over the next two years.

Enbridge has pegged the cost of the Canadian segment of Line 3 at $5.3 billion, with an additional $3.8 billion budget for the U.S. segment.

It estimates the pipeline will be in service in the second half of 2019, although analysts cautioned it may take until the first quarter of 2020 if substantial civil disobedience delays construction.

The pipeline company was given 60 days to negotiate a settlement with the Fond Du Lac Band to determine routing on a short piece of the pipeline that crosses its land but will be able to go around if no agreement can be reached.

“This is a crucial piece of infrastructure to help debottleneck Enbridge’s existing egress capacity out of Western Canada and should allow for heavy oil differentials to tighten in 2020,” analyst Ian Gillies of GMP FirstEnergy Capital said in a report.

The current lack of capacity on export oil pipelines has been blamed for steeper than usual discounts in prices for Canadian heavy oil.


Companies in this article: (TSX:ENB)

The Canadian Press

Share This:

More News Articles

New SHOWCASE Directory Companies


RAM Industries Inc.
RHK Hydraulic Cylinder Services Inc.