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Husky Energy Inc. says it was able to offset the pain of low bitumen prices caused by Enbridge Inc.'s pipeline problems in the last quarter by shipping crude on the rival pipe network owned by TransCanada Corp.



The price of heavy oil and bitumen in Alberta dropped after Enbridge Inc.'s pipeline network was disrupted by leaks last fall, forcing a number of energy companies to either cut back production or sell it at reduced rates.



Husky, however, said it was able to access TransCanada Corp.'s new Keystone line, which only began shipping crude from the oil sands to refineries in the United States last year.



"Keystone did have a beneficial impact for the entire industry, and the timing of Keystone's line-fill [and its]operation was fortuitous given what happened on Enbridge," Terrance Kutryk, Husky's vice-president in charge of midstream and refined products, said in a conference call.



TransCanada began filling the 3,456-kilometre-long pipeline, which ferries oil from Western Canada to refineries in Illinois and Oklahoma, in the fourth quarter of 2009. Nine million barrels of oil were needed to fill it, which was expected to suck up about 6 per cent of Canada's heavy oil production. However, with Enbridge's pipeline system suffering, TransCanada was able to mop up some of the excess production as it launched its new pipeline.



"It was fortunate timing," said Michael Dunn, an analyst at FirstEnergy Capital Corp.



Terry Cunha, a spokesman for TransCanada, would not disclose how much additional heavy oil it has shipped as a result of Enbridge's woes, but believes those who recently diverted crude to Keystone may stick around. "Some customers have had the chance to evaluate the quality of our service that might otherwise not have done so," he said in an e-mail. "We feel that this will support the decision to use the line for future shipments."



Husky did not have to slow down oil production because of Enbridge's leaks, the company said. But it did increase the amount of oil it is storing to "mitigate the impact of selling medium and heavy crude oil and bitumen at distressed prices," given the price difference between the heavier crude varieties and light oil, the company said in a statement detailing its fourth-quarter results.



The integrated oil company, which is controlled by Hong Kong billionaire Li Ka-Shing, made $305-million or 35 cents per share in the fourth quarter, down from $32-million or 38 cents in the fourth quarter of 2010. Cash flow from operations, which hints at a company's ability to fund its projects, climbed to $1.04-billion or $1.21 per share in the quarter, up from $657-million or 77 cents last year.



Husky produced an average of 289,500 barrels of oil equivalent per day in the quarter, up from 288,700 barrels per day in the third quarter. Mr. Dunn said Husky's production results are lower than what some investors expected. The company's production was hindered by scheduled maintenance at one of its facilities off Canada's East Coast.

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