Enbridge Inc. is making executive changes, raising the cost estimate of a major pipeline replacement and issuing $400-million of stock in a slew of announcements one day after it won federal approval for its contentious Northern Gateway project.
Enbridge said Richard Bird, the company’s chief financial officer and corporate development head, is retiring at the end of this year, after two decades with the company.
Mr. Bird’s position will be split in two, with John Whelen becoming senior vice president, finance, and Vern Yu being promoted to senior vice president, corporate development. Mr. Whelen is currently senior vice-president and controller and Mr. Yu is senior vice-president liquids pipeline business and market development.
The company also said it had finalized the cost of replacing its Line 3 oil pipeline to Superior, Wisc., from Edmonton. The cost is now $7.5-billion, a $500-million jump from the estimate the company gave in March.
Enbridge said that all of the increase in cost is in the Canadian portion of the project, which is now expected to reach $4.9-billion. The U.S. portion is pegged at $2.6-billion (U.S.), with the cost shared by Enbridge and its American affiliate, Enbridge Energy Partners LP.
The 1,660 kilometre, 46-year-old pipeline has suffered a number of ruptures over the years, and currently runs well under capacity.
Line 3 now moves 390,000 barrels a day, with shipments restricted by the company’s view of its ability to handle higher volumes. The replacement would raise Line 3’s output to 760,000 barrels a day.
To fund the increase, Enbridge said it reached an agreement with RBC Dominion Securities and Credit Suisse to issue 7.86 million common shares at $50.90 each in a bought deal. The $400-million proceeds will be used to fund the increase in Enbridge’s company-wide capital program over the next four years, which is now set at $42-billion, it said.
Northern Gateway, for which dozens of approval conditions must be satisfied before construction can begin, is not included in that total.