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Enbridge (ENB) to Start Oil Sand Crude Shipment in Line 3

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Enbridge Inc. (ENB - Free Report) is planning to start transporting crude through its Line 3 oil pipeline, which is advancing toward completion, per Bloomberg.

Per a notice to shippers, the company is offering 620,000 barrels a day of capacity in its Line 3 pipeline in October.  This involves 350,000 barrels a day of light oil capacity and 270,000 barrels a day of heavy oil capacity. The capacity provided to shippers is a rough measure as there are several components, such as line fill, system outages for construction and tie-in work, which need to be completed.

The decision to start the Line 3 pipeline came after the latest court ruling, which supports the state water quality and wetland permit for the Line 3 project construction. The favorable court ruling removes one more hurdle to the completion of the 760,000-barrel-a-day pipe, which will expand Canada oil sands’ exports to the United States.

The Line 3 replacement project has been more complicated in Minnesota as environmental groups and government agencies resisted the project to avoid environmental and social consequences. In 2014, Enbridge proposed the Line 3 Replacement project and expects the corroding pipeline’s replacement to improve safety, while boosting its earnings.

Canada oil sand producers have been struggling for years due to the shortage of export pipelines as projects face increasing investigations from courts and regulators. The start of Line 3 is expected to bring relief to oil sand producers to ensure steady supplies of North America crude oil to address the rising energy demand.

Company Profile & Price Performance

Headquartered in Calgary, Alberta, Enbridge is a leading energy infrastructure company.

Shares of the company have outperformed the industry in the past six months. The stock has gained 13.1% compared with the industry’s 7% growth.

 

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Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Cimarex Energy Company , Cheniere Energy, Inc. (LNG - Free Report) and RPC, Inc. (RES - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cimarex’s earnings for 2021 are expected to increase 13.2% year over year.

Cheniere’s earnings for 2021 are expected to surge 126.3% year over year.

RPC’s earnings for 2021 are expected to jump 511.1% year over year.


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