A major investor reduces holdings while a pipeline company boosts capacity for cross-border crude
Enbridge is making one of its boldest moves yet with a US$1.4bn pipeline expansion, but not all major investors are doubling down, according to Reuters.
The Canada Pension Plan Investment Board (CPPIB) has sharply reduced its stake in Enbridge Inc., reporting a 23.99 percent decrease in holdings for the most recent quarter.
According to recent filings reported by Fintel, CPPIB now owns just over 10 million shares, down from more than 13 million shares in the previous quarter, with the position valued at US$506.8m as of September 30.
Even as CPPIB trims its exposure, Enbridge is moving ahead with the Mainline Optimization Phase 1 (MLO1) project, a significant expansion that will add 150,000 barrels per day to its Mainline network and 100,000 barrels per day to the Flanagan South Pipeline.
Reuters reported that the additional capacity is expected to come online in 2027, broadening access for Canadian heavy crude to US refineries in the Midwest and Gulf Coast.
Enbridge’s Mainline system, which shipped a record 3.1 million barrels per day on average in the third quarter, will see increased capacity through upstream optimizations and terminal upgrades.
The Flanagan South Pipeline will add new pump stations and expand terminal capacity.
The expansion is backed by long-term take-or-pay contracts for the route from Edmonton to Houston.
Colin Gruending, president of liquids pipelines at Enbridge, described the Mainline Optimization Phase 1 (MLO1) as providing “capital-efficient and timely egress from Canada.”
He said the project supports production growth and improves connectivity to “the best refining markets in North America,” according to Reuters.
