November 4, 2009 / 7:32 PM / 8 years ago

WRAPUP 1-TransCanada profit falls, Enbridge gains

* Enbridge profit beats forecasts, TransCanada meets them

* Enbridge net rises 105 pct to C$303.8 mln

* Boosts 2009 profit forecasts

* TransCanada net down 12 pct to C$345 mln

* Warns of delays at Bruce power station (In U.S. dollars unless noted.)

By Scott Haggett

CALGARY, Alberta, Nov 4 (Reuters) - Enbridge Inc (ENB.TO) and TransCanada Corp (TRP.TO), the two big Canadian pipeline companies whose fortunes are increasingly tied to Alberta's vast oil sands, posted divergent profit reports on Wednesday with the more oil-sands-focused Enbridge coming out on top.

Both companies are backing big expansions of their pipeline networks to carry rising production from the oil sands, the largest oil reserve outside the Middle East, to U.S. refiners.

After the economic crisis forced construction delays and deferrals, new projects to exploit the oil sands are getting back on track because of strengthening crude prices and signs of an economic rebound.

"We're encouraged by increasing signs of renewed activity in the oil sands as commodity prices have recovered," Pat Daniel, Enbridge's chief executive, said on a conference call on Wednesday.

The two companies are moving to boost their ability to ship rising production from the oil sands to the United States as U.S. imports from Mexico and Venezuela wane.

Enbridge's Alberta Clipper project and TransCanada's Keystone pipeline both target the U.S. Midwest refining market and, eventually, the massive concentration of refineries on the U.S. Gulf coast,

Enbridge, which ships the lion's share of Canada's oil exports to the United States, reported a better-than-expected third-quarter profit on Wednesday and raised its full-year adjusted earnings forecast on strength in its liquid pipelines and natural gas businesses.

Enbridge said net income more than doubled C$303.8 million ($286.6 million), or 83 Canadian cents a share, from C$148.4 million, or 41 Canadian cents, a year earlier.

Adjusted net income, which excludes most one-time items, rose 78 percent to C$152.3 million, or 42 Canadian cents, topping the 38 Canadian cent average analyst estimate compiled by Thomson Reuters I/B/E/S.

Enbridge's profit gain was spurred by better returns from its oil pipeline business as it boosted capacity to the United States and completed projects.

It raised its 2009 earnings forecast to between C$2.30 and C$2.36 per share from its previous forecast of C$2.18 to C$2.32.

The company is building new gas-gathering lines in the Gulf of Mexico and its 450,000 barrel per day Alberta Clipper pipeline from Hardisty, Alberta, to Superior, Wisconsin, is expected to be completed by the middle of next year.

TransCanada, the country's biggest pipeline firm, is also betting on increased U.S. demand for oil sands crude and has almost completed construction of its $5.2 billion Keystone pipeline to the U.S. Midwest.

But in the third quarter the company was weighed down by its power investments as the recession crimped electricity demand in Western Canada and forced down prices.

The company said net income fell 12 percent to C$345 million, or 50 Canadian cents a share, in the quarter from C$390 million, or 67 Canadian cents, a year earlier.

The drop had been expected and excluding most one-time items TransCanada earned C$335 million, or 49 Canadian cents a share, matching the average analyst estimate compiled by Thomson Reuters I/B/E/S.

TransCanada's power-generation operations include New York City's Ravenswood generating station and a stake in the Bruce nuclear plant in Ontario.

It warned on Wednesday that work to refurbish two 750-megawatt reactors at the Bruce A station was behind schedule.

Instead of starting up next up next year, the company said work on Unit 1 wouldn't be complete until the middle of 2011, with Unit 2 wrapped up four months after that.

"We had some challenges ... with some delays in the retube package," said Alex Pourbaix, president of TransCanada's power and gas storage business.

TransCanada said construction of Keystone oil pipeline, which will carry 450,000 barrels to U.S. refineries, is 90 percent complete. It expects to start filling the 3,456-kilometer (2,148-mile) line by the end of the year and will begin delivering crude in the first quarter of 2010.

Enbridge shares rose 95 Canadian cents, or 2.3 percent, to C$42.90 early on Wednesday afternoon on the Toronto Stock Exchange. TransCanada's shares rose 12 Canadian cents, or 0.4 percent, to C$32.99. ($1=$1.06 Canadian) (Additional reporting by Scott Disavino and R. Manikandan; editing by Peter Galloway)

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