A Closer Look at Enbridge Inc (USA) (ENB)’s Earnings

A look ahead
Last week Energy Transfer Partners LP (NYSE:ETP) officially announced it was partnering with Enbridge in the conversion of certain segments of its Trunkline system from natural gas to crude oil. The line connects the eastern portion of the Gulf Coast refining district to the hub at Patoka, Ill. Right now gas flows north to south, so the project entails not only switching commodities, but flipping directions. The line has a 30-inch diameter and should have a capacity of up to 420,000-660,000 barrels per day. This will be the first pipeline to connect crude oil from Patoka to St. James and it is scheduled to come online in 2015.

Aside from that 50/50 joint venture, Enbridge also plans to expand its Canadian Mainline system, which stretches from Hardisty, Alberta, to the Canada/U.S. border at Gretna, Manitoba. Paired with an expansion of Enbridge Energy Partners’ Lakehead System that begins at Neche, N.D. (right over the border from Gretna), this $600 million undertaking is expected to increase capacity on the both systems by 230,000 barrels per day, and should be in service by 2015.

And, of course, the drama of the Northern Gateway pipeline will continue to unfold. Not a single question about the $6 billion project came up during the company’s conference call Q&A. For now at least, it remains a courtroom battle.

Foolish takeaway
There is plenty of good news here, particularly with the liquids pipelines. The other item that came to light on the conference call was how much effort Enbridge is putting into safety and maintenance, which includes inspecting all of its pipe and making appropriate replacements. The company has spent close to $1 billion a year for the last two years, and will spend about that much in 2013 en route to establishing and implementing best practices for safety and maintenance. Enbridge should be in great shape going forward.

The article A Closer Look at Enbridge’s Earnings originally appeared on Fool.com and is written by Aimee Duffy.

Fool contributor Aimee Duffy has no position in any stocks mentioned. Click here to see her holdings and a short bio. If you have the energy, follow her onTwitter, where she goes by @TMFDuffy. The Motley Fool recommends Enterprise Products Partners L.P.

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