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Enbridge says Canada oil pipeline congestion may continue even once TMX starts

2024.02.09 11:35


© Reuters. FILE PHOTO: The emblem of Calgary-based Enbridge, one in all North America’s largest vitality infrastructure corporations, is displayed through the LNG 2023 vitality commerce present in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo

By Nia Williams and Tanay Dhumal

(Reuters) -Growing Canadian oil manufacturing means shipper volumes may nonetheless be rationed on the Enbridge (NYSE:) Inc Mainline pipeline system even once the Trans Mountain Expansion (TMX) venture is working, an Enbridge government mentioned on Friday.

Calgary-based Enbridge shipped a report 3.2 million barrels per day (bpd) of crude on the Mainline within the fourth quarter of 2023, serving to it report quarterly income of C$1.73 billion, in comparison with a lack of C$1.07 billion a 12 months earlier.

Last 12 months Enbridge warned the start-up of the 590,000 bpd TMX venture would probably trigger Mainline volumes to fall, however that notion has grow to be a “bit of a stale concept”, mentioned Colin Gruending, government vice chairman of liquids pipelines.

“(TMX) has been delayed materially and in that multi-year period of delay, supply has structurally and permanently grown,” Gruending instructed an earnings name.

He mentioned these delays have been a “slight tailwind” for the Mainline, which ships the majority of Canada’s crude exports to the United States.

“We may still have apportionment once TMX comes in, depending on the month or day or crude slate,” Gruending added.

Apportionment refers to rationing how a lot crude every shipper can transfer on a pipeline, and excessive apportionment tends to weigh closely on Canadian crude costs.

Gruending estimated Canadian producers would add round 750,000 bpd of provide in a four-year interval as much as the tip of 2025.

The Canadian government-owned TMX venture is concentrating on a second quarter start-up however has struggled with repeated delays and ballooning prices.

Despite the report volumes, Enbridge reported a decrease quarterly adjusted core revenue from the Mainline system of C$1.30 billion in contrast with C$1.34 billion a 12 months.

The firm reached a Mainline toll settlement with oil shippers final 12 months which was decrease than the earlier one, after scrapping earlier plans for long-term contracts.

Enbridge reported a quarterly adjusted core revenue of C$833 million from its U.S. gasoline transmission unit, in contrast with C$844 million a 12 months earlier.

demand within the U.S. has been low attributable to comparatively gentle climate situations within the fourth quarter.

On an adjusted foundation, the corporate earned 64 Canadian cents per share, in contrast with analysts’ estimates of 68 Canadian cents per share, based on LSEG knowledge.

Enbridge shares have been final down 0.4% or C$46.02 on the Toronto Stock Exchange.

($1 = 1.3452 Canadian {dollars})

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