(Adds comments, details on Mainline system volumes)
By Nia Williams
CALGARY, Alberta, Feb 19 (Reuters) - Enbridge Inc, Canada’s largest pipeline company, reported a higher-than-expected quarterly profit on Friday and said it will defer C$5 billion ($3.62 billion) in spending from this year and next until 2018 due to project delays.
Shares of Enbridge, whose customers have been hard hit by the collapse of crude oil prices, fell 1.1 percent to C$42.92 on the Toronto Stock Exchange as concerns about its funding plan and growth strategy surfaced and the recent oil market rally lost steam.
“Overall, we view the quarter as neutral for the stock weighing off the good results and reiteration of 2016 guidance against what we see as continued market concerns about execution of the funding plan along with the deferral of growth,” RBC Capital Markets analyst Robert Kwan said in a note.
Calgary-based Enbridge’s U.S. arm, Enbridge Energy Partners LP, said on Tuesday the Sandpiper and Line 3 replacement pipeline projects were delayed to 2019 from 2017 to allow for completion of environmental reviews and permitting in Minnesota.
The Sandpiper project is intended to supply crude oil from North Dakota to refineries located in the U.S. Midwest and eastern Canada. The Line 3 Replacement project begins in Alberta and ends in Wisconsin.
Enbridge has a C$26 billion commercially secured capital program through 2019, of which about C$8 billion has already been funded and brought into service through the end of 2015.
Chief Executive Al Monaco said the company’s priority would be funding its secured capital program, but added that it would continue to look for organic growth and strategic asset deals.
“Given a higher cost of capital today that we are seeing, we will be lowering the microscope even further to make sure that we are deploying the most optimal projects,” Monaco said.
Enbridge’s Mainline system, which moves the bulk of Canadian crude exports to the United States, shipped an average of 2.2 million barrels per day in the fourth quarter, compared with 2.1 million a year earlier. It hit a record high of 2.6 million bpd last month.
The company said it is in the process of securing approval to replace up to 100,000 bpd per day of light crude shipped on the system with heavy barrels, if light oil volumes decline as a result of the global crude price slump.
Net income attributable to shareholders rose more than fourfold to C$378 million, or 44 Canadian cents per share, in the quarter ended Dec. 31.
Excluding items, the company reported a profit of 58 Canadian cents per share, above analysts’ average estimate of 52 Canadian cents, according to Thomson Reuters I/B/E/S. ($1 = 1.3816 Canadian dollars) (Additional reporting by Manish Parashar and Amrutha Gayathri in Bengaluru; Editing by Don Sebastian and Paul Simao)