8-K

ENBRIDGE INC 8-K Report (Apr 1, 2014)

Filed April 1, 2014For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

This Form 6-K filing from Enbridge Inc. (ENB) on April 1, 2014, incorporates several press releases from March 2014, detailing significant strategic developments. The most impactful news for investors is the announcement of a $7 billion Line 3 Replacement (L3R) Program, which involves replacing the entire Line 3 between Hardisty, Alberta, and Superior, Wisconsin. This project, expected to be completed by the second half of 2017, aims to enhance reliability, reduce long-term integrity costs, and is supported by shipper surcharges. The company also announced a $275 million offering of Series 9 Preferred Shares to fund capital projects and reduce debt, and the National Energy Board's approval of the Line 9B reversal and expansion, which will enable the delivery of North American crude oil to Ontario and Quebec refineries.

Key Highlights

  • 1Enbridge announced a significant $7 billion Line 3 Replacement (L3R) Program to replace all segments of Line 3 between Hardisty, Alberta, and Superior, Wisconsin, with completion targeted for the second half of 2017.
  • 2The L3R Program is supported by shipper surcharges designed to provide an appropriate return on the additional capital required, with provisions for shippers to cancel if cost estimates exceed preliminary figures by more than 15%.
  • 3The L3R Program is expected to be the largest project in Enbridge's history and is projected to significantly extend its earnings per share growth rate beyond 2017, contributing to a total of $36 billion in secured investments by 2017.
  • 4Enbridge successfully closed a $275 million offering of Cumulative Redeemable Preference Shares, Series 9, to partially fund capital projects, reduce existing indebtedness, and for general corporate purposes.
  • 5The National Energy Board (NEB) approved Enbridge's Line 9B reversal and expansion project, allowing for the flow of North American crude oil to Ontario and Quebec refineries, subject to 30 conditions.
  • 6The Line 9B approval is part of Enbridge's Eastern Canadian Refinery Access Initiative and is expected to protect jobs and strengthen the economy in Quebec.
  • 7The company highlighted its commitment to using existing infrastructure and addressing stakeholder concerns regarding safety and environmental sensitivity for the Line 9B project.

Frequently Asked Questions

The primary purpose of the L3R Program is to replace all segments of Enbridge's Line 3 between Hardisty, Alberta, and Superior, Wisconsin. This initiative aims to enhance the long-term reliability and integrity of the pipeline, reduce future maintenance costs, and ensure it can meet expected throughput demands from shippers.

The L3R Program will be financed through shipper surcharges on barrels moving on the mainline. These surcharges are designed to provide Enbridge with an appropriate return on the capital invested. Shippers have the option to cancel the program if the final cost estimate exceeds the preliminary estimate by more than 15%.

The NEB's approval allows Enbridge to reverse the flow of Line 9B and expand its capacity, enabling the delivery of North American crude oil to refineries in Ontario and Quebec. This is expected to provide reliable, competitively priced crude oil, protect jobs, sustain the petrochemical industry, and strengthen the economy in Quebec.

The $275 million offering of Series 9 Preferred Shares was undertaken to provide Enbridge with capital to partially fund its ongoing capital projects, reduce existing indebtedness, and support other general corporate purposes of the company and its affiliates.