Costs mount for Enbridge on spill, 2007 blast
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Enbridge Inc's struggles mounted on Tuesday as its U.S. affiliate said the oil spill that fouled a Michigan river system could cost as much as $400 million and regulators slapped it with a $2.4 million fine for a deadly 2007 explosion in Minnesota.
Enbridge Energy Partners, the Houston-based operator of the U.S. part of the company's massive pipeline system, said total charges for the July 26 pipeline rupture near Marshall, Michigan, could be $300 million to $400 million, excluding any fines or penalties.
The cost would include charges for emergency response, environmental remediation, pipeline repairs, claims by third parties and lost revenue, Enbridge said in a filing with the U.S. Securities and Exchange Commission.
After insurance recoveries, the charges could be $35 million to $45 million, said Enbridge, whose ruptured pipeline spilled 19,500 barrels of heavy Canadian crude into the Kalamazoo River system.
The charges are not expected to impair Enbridge Energy's ability to pay distributions to its unitholders, it said.
Calgary-based Enbridge is working to clean up the spilled oil in an effort involving more than 1,300 people as the outage of the 190,000 barrel a day pipeline, called Line 6B, complicates the North American oil and refining markets.
It is awaiting a decision from the U.S. Department of Transportation's pipeline safety agency on its plan to restart Line 6B. Regulators rejected its last plan on Friday, saying the line required more extensive testing before oil flows could resume.
As the company worked to rebuild its reputation in Michigan, U.S. regulators slapped it with a $2.4 million fine a November 2007 explosion in Clearbrook, Minnesota, that killed two workers. Continued...