Q: Good morning,
I read that Enbridge cut its pipeline tolls by more than 10% in late August due to competition from the TMX pipeline. Will a cut of this size have a significant impact on ENB earnings? Which do you consider a better investment at this time: ENB or TRP? Thanks as always for your advice.
I read that Enbridge cut its pipeline tolls by more than 10% in late August due to competition from the TMX pipeline. Will a cut of this size have a significant impact on ENB earnings? Which do you consider a better investment at this time: ENB or TRP? Thanks as always for your advice.
5i Research Answer:
We would not expect a material impact. Oil volumes have increased overall, and ENB has 75% of its volumes going into the US so the TMX competition, while it exists, is not likely to be significant to ENB, especially considering some of its other growth initiatives. Most pipelines remain full, and TMX has resulted in less customer rationing on ENB lines as opposed to lower volumes.