Enbridge rethinks U.S. natural gas business as Q1 revenue plunges

HOUSTON – Enbridge Energy Partners LP is looking at a possible sale of its main natural gas business in the United States, which has experienced a 51 per cent decline in first-quarter revenue and a higher operating loss compared with last year.

The Enbridge-run limited partnership, which is primarily involved in transporting oil from Western Canada and North Dakota, says it is reviewing its holdings in Midcoast Energy Partners and Midcoast Operating LP — its main natural gas holdings.

Enbridge Energy Partners also announced a 43 per cent decline in net income and a 26 per cent decline in overall revenue in the first quarter, mainly attributed to weakness in natural gas.

Total revenue was US$1.06 billion, including $431.9 million from natural gas. That’s down from US$1.43 billion, including US$873.5 million from natural gas, in the first quarter of 2015.

Net income dropped to US$80 million or seven cents per unit from US$140.1 million or 26 cents per unit. Adjusted net income dropped 20 per cent to US$113.8 million or 17 cents per unit from US$142.8 million or 26 cents per unit.

The natural gas segment’s operating loss increased to US$29.9 million from US$26 million and it reduced total net income by $22.8 million. The liquids business increased its operating profit to $301.4 million from $270.2 million.

Enbridge says its strategic review of the natural gas business is in its early stages and no decision has been reached.