Enbridge reports lower 2010 earnings, but sees growth in 2011

Enbridge Inc. announced 2010 net earnings of $963 million, or $2.60/common share, for the year ended Dec. 31, 2010, compared with $1.555 billion, or $4.27/common share, for the year ended Dec. 31, 2009.

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Feb. 4 -- Enbridge Inc. announced 2010 net earnings of $963 million, or $2.60/common share, for the year ended Dec. 31, 2010, compared with $1.555 billion, or $4.27/common share, for the year ended Dec. 31, 2009. The company's earnings for 2010 included new revenue from the Alberta Clipper crude and Southern Lights diluent pipelines, both of which entered service during the year. Enbridge also noted customer growth in gas distribution as having had a positive effect on its 2010 finances.

The company attributed the lower overall earnings to the absence of one-time favorable items experienced in 2009, including a $329 million gain on the sale of its 24.7% stake the Oleoducto Central SA (Ocensa) crude pipeline in Colombia (OGJ Online, Mar. 17, 2009). Enbridge also cited costs of $103 million and lost revenue of $3 million stemming from its Line 6B and Line 6A crude oil releases as lowering 2010 earnings. The company anticipates that all costs, excluding fines and penalties, incurred from the leaks will ultimately be recovered through its insurance policies.

Patrick D. Daniel, Enbridge president and chief executive officer, said Enbridge will focus on the expansion of its oil sands infrastructure, further developments in the Bakken and Three Forks formations, new green energy projects, and its natural gas businesses in 2011.

Enbridge has $2.6 billion in oil sands infrastructure projects expected to enter service between 2011 and 2014 (OGJ, Sept. 10, 2010). These projects include expansion of its Athabasca Pipeline to its maximum capacity of 570,000 b/d, expansion of the Waupisoo Pipeline to 600,000 b/d (OGJ Online, June 28, 2010), three new pipelines, the Woodland, Wood Buffalo, and Norealis pipelines, and expansion of Enbridge's Edmonton terminal facilities. Enbridge's Regional Oil Sands System currently connects five producing oil sands projects and will have eight producing projects connected by 2014.

Enbridge expects the next phase of its Bakken Expansion Program being constructed in North Datoka and Saskatchewan to come into service in early 2013, adding approximately 145,000 b/d of incremental capacity and connecting to the Enbridge Mainline (OGJ Online, Aug. 25, 2010).

Daniel also noted Enbridge Energy Partners’ 2010 acquisition of Texas natural gas gathering and processing assets totaling $700 million in the prolific Granite Wash area as representative of the sort of growth the company will pursue moving forward. Enbridge described sanctioning by Chevron of the Jack-St. Malo project in the US Gulf of Mexico as favorable to the continued development of its Walker Ridge project.

The company is also expanding condensate processing capacity at its Venice, La., facility and expects this expansion to be in service in late 2013. The expanded condensate processing capacity will accommodate additional natural gas production from the recently sanctioned Olympus offshore oil and gas development. Natural gas production from Olympus will move to Enbridge's onshore facility at Venice via Enbridge's Mississippi Canyon offshore pipeline where it will be processed to separate and stabilize the condensate. The expansion will more than double the capacity of the facility to approximately 12,000 b/d of condensate.

Contact Christopher E. Smith at chriss@ogjonline.com.

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