* Still sees Kitimat as best option, but open to study
* Flanagan South open season extended by a week
* Q4 adjusted EPS C$0.37 vs. C$0.39 estimate
* Shares drop 3.6 percent
By Jeffrey Jones
CALGARY, Alberta, Feb 17 (Reuters) - Enbridge Inc opened the door on Friday to re-routing its Northern Gateway oil pipeline from Canada's oil sands to a Pacific port north of the current proposed endpoint of Kitimat, British Columbia, where it faces staunch local opposition.
Enbridge Chief Executive Pat Daniel said he still believes Kitimat, with its sheltered deep-water harbor, is the best terminus for the controversial C$5.5 billion ($5.5 billion) pipeline, citing extensive studies done for the regulatory application.
However, he told a conference call on Enbridge's fourth-quarter results that the company will take another look at the port of Prince Rupert, which it had ruled out earlier because it would require the pipeline right-of-way to extend in a narrow passage for about 80 kms (50 miles) along the Skeena River.
"Recently, I have indicated that we will re-examine that to see whether there is another way to get to Prince Rupert, but all of our engineering and environmental studies continue to point in the direction of Kitimat being the best alternative," Daniel said. "We want to make sure that we have thoroughly evaluated any and all routing opportunities."
Prince Rupert is about 110 km (69 miles) north of Kitimat on the British Columbia coast.
Under the current proposal, the pipeline would carry 525,000 barrels of oil sands-derived crude 1,177 km (731 miles) across the Rocky Mountains to Kitimat from near Edmonton, Alberta. Public hearings into the project began last month and a record number of people have registered to participate.
The project is aimed at lifting returns for Canadian oil sands producers by allowing large volumes to be shipped to more lucrative Asian markets. It gained urgency after TransCanada Corp's proposed Keystone XL pipeline from the Alberta oil sands to Texas stalled due to Washington's refusal to approve it within a tight deadline set by the U.S. Congress.
However, several aboriginal communities along the proposed route and numerous environmental groups have said they do not want Northern Gateway to proceed.
Daniel said Enbridge has not acquired any options to buy docklands in Prince Rupert. Kitimat is not devoid of industrial development, and several proposals to build liquefied natural gas terminals have not attracted the same level of opposition that Northern Gateway has.
Uncertainty over the eventual fate of the proposal has prompted FirstEnergy Capital Corp analyst Steven Paget to hold off putting forecasts for spending or cash flow for the project into his financial models for Enbridge, which he said is rare for a development that has committed shippers.
He said he did not know if changing the route would remove any opposition.
"I would say if Enbridge believes it will make a material difference to the chances of this project going ahead they will do it, they will find away to amend the application," Paget said. "But it's very difficult to tell if moving it to Prince Rupert would change much."
Northern Gateway is one of several projects Enbridge, the main mover of Canadian crude exports to the United States, is planning as a way to diversify markets.
The company said it has extended by a week an "open season" to gauge shipper support for its Flanagan South pipeline project in the U.S. Midcontinent as some customers have asked for longer-term commitments.
Flanagan South is part of the Gulf Coast Access project, which also includes the Seaway pipeline, now going through a project to reverse its direction so that it will flow to Texas refineries from Cushing, Oklahoma. Interest is strong, Daniel said.
The reversed Seaway pipeline is expected to start moving 150,000 barrels a day of oil by June, eventually rising to 400,000 bpd.
In the fourth quarter, Enbridge, which also operates natural gas pipelines, a gas distribution business as well as wind farms, earned C$335 million, or 44 Canadian cents a share, up from C$326 million, or 43 Canadian cents a share, a year earlier.
On an adjusted basis, it earned 37 Canadian cents a share.
Revenue rose 31 percent to C$5.44 billion.
Analysts on average had expected earnings of 39 Canadian cents a share, on revenue of C$4.41 billion, according to Thomson Reuters I/B/E/S.
Enbridge shares were down C$1.41, or 3.6 percent, at C$37.79 on Friday. They had climbed 37 percent in the past year.