Enbridge Income Fund Holdings Inc. EBGUF

Line 3 upgrade - growth asset or stranded asset?

[autofocus111]

It looks like ENF shares will continue to struggle in the immediate future on concerns over NAFTA negotiations and the Line 3 upgrade regulatory delays.

Personally, I don't believe a failure of NAFTA will create obstacles to Canada's O&G sector as USA badly needs our energy products and almost certainly will not place tarrifs on these, even if NAFTA is killed. But until there is clarity here that's an overhang risk for ENB/ENF due to the massive export pipelines it owns.

I am more concerned about tail risks to Line 3, Minnesota PUC is scehduled to issue a final ruling on that state's portion of ENB's Line 3 upgrade project in April..As ENF investors know, the Canadian side of the upgrade work has been in progress for at leasst several months now. If somehow the project is killed off by the MN regulatory body, what happens to ENF's investment here? Will the capital costs of the upgrade have to be partly/fully written off? Will the upgraded line here still deliver oil at its full higher rated capacity to the border for offtake by other lines on the other side, or will it become a quasi-stranded asset that will operate at the resttricted lower flows of the existing Line 3?

In the event MN throws a monkey wrench in the works, I will be here, ready to scoop up more shares at my limit buy order of $24, as I think after inital panic sellinig in such a case, cooler heads will prevail on an appeal (I assume one would be possible) and the Line 3 upgrade eventually gets approval to proceed there..

[ddong66]

Thanks your post. I bought many yesterday and today but I will hold and see a while. 

[jgzeger]

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[freedomfiddy]

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[autofocus111]

Rate hikes have been pretty much expected lately. A NAFTA failure and the recent games by MN PUC not so much. But yeah, once the January rate hike news is in, things should settle down a bit more.

[stocktalk]

In my humble opinion  several issues are affecting shareprice. - line 3 approval, which will be soon. - interest rate increase which is adjusted in sp already. - bottle neck in current pipeline capacity.

[autofocus111]

What I woukld like to have a better handle on is the tail risk of a negative decision by MN PUC. If the Line 3 replacement was nixed by regulators there, what is the implication to ENF? Line 3 work is in-progress in Canada (not sure about USA ex-MN). In the event of a negative outcome in MN that stops the replacement project there, will ENF be able to fully utilize the increased capacity of the

[freedomfiddy]

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[bcsc]

That's only 20% below closing price on Friday.

[joeybats63]

I have followedENF and ENB for awhile. If you wanted safe dividends and returns the one that outperforms all the time is ENF. The pipeline 3 is more an ENB fixture and that has been a problem for awhile. The sticking point is Minnesota where an indigenous group is battling where the pipeline should be directed. Also with Enbridge buying Spectra and taking on it's $22 billion debt. That alone

[freedomfiddy]

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[joeybats63]

No ENF wouldn't suffer the fate like ENB. It's a fund and this is what it does.... Enbridge Income Fund Holdings Inc is engaged in the generation, transportation and storage of energy through its green power generation facilities, liquids transportation and storage facilities. Yes they are a subsidiary of ENB but rely on smaller assets and cleaner power sources.

[autofocus111]

@joey "The pipeline 3 is more an ENB fixture" Huh?? The Line 3 replacement most certainly is a major issue for ENF. Line 3 forms part of the liquids mainline system and the Canadian portion of this asset (and onwership of the Line 3 replacement project) was dropped down by ENB to ENF a couple of years ago. If the USA side of the replacement project (dropped down by ENB to EEP)

[freedomfiddy]

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