Enbridge CEO ‘deeply saddened’ by death in Kentucky gas pipeline explosion

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Enbridge president and CEO Al Monaco, right, addresses the company's annual meeting in Calgary on May 8, 2019. Enbridge Inc. says a number of unusal factors boosted its second-quarter profit to $1.74 billion, while operations also performed well amid strong demand for transporting crude oil through its pipeline systems. THE CANADIAN PRESS/Jeff McIntosh

CALGARY — A natural gas pipeline shut down after a massive explosion killed a woman in Kentucky on Thursday will not go back into service until it is “absolutely safe to do so,” the CEO of Enbridge Inc. vowed Friday.

In a news release, Al Monaco said he is “deeply saddened” by the death in the incident involving the company’s Texas Eastern natural gas pipeline.

“Our hearts go out to the family and the community,” said Monaco on a conference call to discuss second-quarter results on Friday.

“Our first concern, of course, is for those impacted, so we mobilized resources to assist and support them. Secondly, we’re working with the federal agencies to investigate what happened and how the learnings can improve our approach and that of the industry in the future.”

The pipeline was shut down after the fiery incident that sent five people to hospital and damaged structures within 450 metres, including destroying at least five homes and railroad tracks and forcing the evacuation of a nearby mobile home park, authorities said.

Kentucky State Police said a handful of people who were missing after the blast have now been accounted for.

While the explosion in Kentucky was unfortunate, analyst Jennifer Rowland of Edward Jones says she doesn’t think it will make it more difficult for Enbridge to win approvals for its other projects.

“I think if the event happened in Michigan or Minnesota, it would add fuel to the fire … But as long as Enbridge handles the incident prudently and appropriately, which I expect them to, I don’t think it will have a meaningful impact,” she said in an email.

She added the investigation could find the cause of the explosion was outside of the company’s control.

Enbridge is under pressure on multiple fronts in the United States.

The state of Michigan is trying to shut down part of its Line 5 pipeline that runs under the Straits of Mackinac in the Great Lakes region and an indigenous group in Wisconsin is suing to remove another piece of Line 5 that runs across its reservation.

Meanwhile, its Line 3 replacement project, which would double capacity on a different pipeline carrying oil from Alberta to the Midwest, has been delayed after a Minnesota court ruled that Enbridge’s final environmental impact statement was inadequate.

Line 5, which ships 540,000 barrels per day of light crude oil and propane to customers in Michigan and Ontario, and Line 3 are both part of Enbridge’s Canadian Mainline pipeline system, which handles most of Western Canada’s crude oil exports.

Enbridge announced Friday the much-anticipated beginning of an open season for the Mainline with bids to be accepted until Oct. 2.

The company wants to change from a common carrier model, where all of the system’s capacity is available on a month-to-month basis, to one where shippers can lock into contracts of up to 20 years, starting on July 1, 2021.

Results of the bidding and contracting of the Mainline will point the way toward future growth possibilities for the system and for its downstream connections, said Monaco on the call.

Mainline capacity would be 3.225 million barrels per day, assuming Line 3 is completed, of which up to 2.9 million bpd would be contracted and 10 per cent, or 325,000 bpd, remain in spot service, Enbridge said.

The change is subject to regulatory approval.

Enbridge also announced Friday it will invest $1.8 billion in a 50-50 partnership with EDF Renouvelables to build the 480-megawatt Saint Nazaire offshore wind farm on the northwest coast of France.

The project is backed by a 20-year fixed price power purchase agreement with the French government and meets all of Enbridge’s usual requirements for expected financial returns, Monaco said.

He added the partnership has the opportunity to move forward with two similar projects in the next 12 to 18 months.

Enbridge reported a second-quarter profit of $1.74 billion or 86 cents per share, up from $1.07 billion or 63 cents per share in last year’s second-quarter.

Adjusted earnings rose to $1.35 billion or 67 cents per share, from $1.09 billion or 65 cents per share, while revenue was $13.26 billion, up from $10.74 billion.

Analysts had estimated $11.06 billion of revenue and 59 cents per share of adjusted income, according to financial markets data firm Refinitiv.

 

Companies in this story: (TSX:ENB)

Dan Healing, The Canadian Press

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