02.22
Enbridge (ENB) – $46.37 – Enbridge Fires Back in Clipper Dispute
Outperform, Average Risk, Price Target: $54.00
Enbridge filed a motion to intervene, protest and request for dismissal of a shipper challenge to the Alberta Clipper project.
The company is seeking the dismissal of Suncor’s petition. Some of the reasons include: (1) Enbridge constructed Alberta Clipper based on an unopposed CAPP settlement. (2) Construction is almost finished and costs are within budget. (3) The challenge is late in the day and Enbridge asserts that Suncor had concerns, but did nothing until now. RBC CM’s view on the issue is unchanged and it recommends using any price weakness as news disseminates as an entry point. With the majority of construction complete, it would be surprising for the FERC to delay the in-service date. A negative decision out of the FERC would defer roughly 5% of Enbridge’s 2011E earnings (about $0.15/share), although Enbridge may have other remedies that would partially, or fully, mitigate any negative decision.
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