Liquid Pipeline Projects Help Boost Enbridge's 2008 Earnings

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Researched by Industrial Info Resources (Sugar Land, Texas)--Oil and gas pipeline owner and operator Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta), recently reported earnings for the fourth quarter and complete 2008 fiscal year. The company reported a 2% increase in adjusted earnings for the quarter, while adjusted earnings for the year increased 6%, moving from $512 million (U.S.) to $544.8 million.

"As we expected," said Chief Financial Officer Richard Bird, "the damage on our systems and upstream platforms from hurricanes Ike and Gustav had a drag on Q4 results. I should also note that the unprecedented fall in commodity prices during the quarter was a real-life stress test of our earnings-at-risk metric." The most hurricane-impacted segment of the company was the Gas Pipelines segment. Adjusted earnings in this segment fell 53% in the quarter on a year-over-year basis, declining from $15 million in 4Q07 to $7.1 million in 4Q08. For the year, the segment's adjusted earnings fell 29%.

Other company segments performed well during the year. Adjusted income for the company's Liquid Pipelines segment grew 16% from 2007, while Gas Distribution and Services grew 21%. Enbridge also owns 27% of Enbridge Energy Partners LLP (NYSE:EEP) (Houston, Texas), which is involved in the transportation and storage of oil and natural gas. Earlier this month, Enbridge Energy Partners reported net income of $403.2 million for the year, an increase of 61.6% from 2007.

"The increase in earnings for 2008 is primarily due to the continuing progress we've made on our slate of commercially secured liquid pipelines projects," said President and CEO Pat Daniel. Industrial Info is currently tracking more than $6 billion of projects of Enbridge and its subsidiaries in the U.S. and Canada, including construction of the $700 million Alberta Clipper crude-oil pipeline. The 635-mile pipeline will run from Hardistry, Alberta, to Superior, Wisconsin, and will have a capacity of 450,000 barrels per day. Colt Engineering (Edmonton) is acting as engineer on the project, construction of which began in May 2008 and is currently scheduled to be completed in November of this year. The 313-mile Southern Lights pipeline, also mentioned by Mr. Daniel, will run from Manitoba to Minnesota and is also scheduled from completion this year. Information on these and other projects can be found in Industrial Info's North American Industrial Database.

All figures are in U.S. dollars and have been converted at the rate of CAN $1 = US $0.8042.

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