Bloomberg News

Enbridge Profit Rises as Rates Boost Oil Pipeline Revenue

February 21, 2012

(Updates with revenue in third paragraph.)

Feb. 17 (Bloomberg) -- Enbridge Inc., the largest Canadian pipeline company, said fourth-quarter profit rose 2.8 percent as it increased rates for oil shippers and margins rose on natural- gas processing.

Net income climbed to C$335 million ($336.8 million) or 44 cents a share, from C$326 million, or 43 cents, a year earlier, the Calgary-based company said in a statement today. Excluding items such as gains and losses from financial contracts, per- share profit was 37 cents, two cents less than the average of 14 analysts’ estimates compiled by Bloomberg. Revenue rose 31 percent to C$5.44 billion.

Enbridge increased rates on an oil pipeline system between Alberta and Illinois, helping to boost revenue, said Steven Paget, an analyst with FirstEnergy Capital Corp. in Calgary.

Oil pipeline net income rose 74 percent to C$203 million as volumes from oil-sands projects increased. Profit rose fivefold to $157 million at the gas pipeline and processing unit aided by wider margins between the price of raw natural gas and products derived from it such as propane and ethane, a raw material for plastics.

Warmer weather than a year earlier damped profit from gas distribution as volumes fell. Utility profit fell 43 percent to C$34 million.

Enbridge owns 24,613 kilometers (15,000 miles) of pipelines that ship more than 2.2 million barrels of crude oil and liquids a day, according to its website.

Pipeline Proposal

The company has proposed to build the Northern Gateway pipeline, a 1,177 kilometer project across the Rocky Mountains that would bring oil from Canada’s oilsands to the coast of British Columbia.

Enbridge said in November it will buy ConocoPhillips’s 50 percent stake in the Seaway pipeline for $1.15 billion and reverse the flow to carry crude from Cushing, Oklahoma, to refineries on the Gulf Coast. A shortage of pipeline capacity between Cushing and Texas has caused Canadian and West Texas oil to trade at a discount to imports.

The earnings statement was released before the start of regular trading on North American markets. Enbridge rose 0.7 percent to C$39.20 yesterday in Toronto.

(Enbridge has scheduled an investor conference call starting at 9 a.m. New York time accessible at EVTS <GO>.)

--With assistance from Bradley Olson in Houston and Jessica Resnick-Ault in New York. Editors: Jessica Resnick-Ault, Steven Frank

To contact the reporters on this story: Mike Lee in Dallas at mlee326@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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