CALGARY, Alberta (Reuters) - Enbridge Inc ENB.TO, Canada’s largest pipeline company, reported a slightly lower-than-expected quarterly profit on Friday as its liquids pipeline business was hit by a massive wildfire in Fort McMurray, Alberta.
The company said oil deliveries were 255,000 barrels per day (bpd), or 10 percent, lower than expected in May and June due to fire disruption, but volumes came back up by the end of last month and are expected to return to normal in the third quarter.
Several producers and pipeline operators halted work in the region for weeks, at one point cutting Canada’s crude output by more than a million barrels a day. All of Enbridge’s pipelines in and out of its Cheecham terminal were shut down.
Enbridge shares were last up 2 percent on the Toronto Stock Exchange at C$52.46, and analysts said investors were likely relieved the impact from the fires had not been greater.
“All in, a good set of results with notably continued strong contribution from new oil infrastructure projects,” BMO analyst Ben Pham said in a note.
Chief executive Al Monaco said growing oil sands production from projects like Suncor Energy’s SU.TO Fort Hills meant capacity on Enbridge’s Mainline system, which ships the bulk of Canadian crude exports to the United States, will become tight.
“We think about 700,000 barrels per day of new capacity is going to be needed to accommodate heavy growth by 2020,” Monaco said.
The company will add 60,000 to 80,000 bpd of capacity by late September by tweaking its crude slates, and has also finished a 70,000 bpd expansion of Line 6B, which can now carry 570,000 bpd from Indiana to Ontario.
Monaco said Enbridge remained committed to building the Northern Gateway pipeline, which would carry crude from Alberta’s oil sands to a deepwater port on British Columbia’s coast and has faced fierce opposition from environmental and First Nations groups.
Northern Gateway faced a setback in June, when a Canadian court overturned the approval for the pipeline, imposing further delays on the C$7.9 billion ($6.07 billion) project.
Earnings from continuing operations attributable to the company’s shareholders fell to C$301 million ($229 million), or 33 Canadian cents per share, in the second quarter, from C$577 million, or 67 Canadian cents per share, a year earlier.
Excluding items, the company earned 50 Canadian cents per share, just missing the average analyst estimate of 51 Canadian cents, according to Thomson Reuters I/B/E/S.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Maju Samuel and James Dalgleish