Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeEnergyEnbridge delays second stage of expansion for Canada's largest oil pipelineThe Calgary-based is pressing ahead with an American leg, moving oil from the Midwest to the Gulf Coast You can save this article by registering for free here. Or sign-in if you have an account.Enbridge on Friday did not greenlight the second phase of improvements to the Mainline system and offered no timelines for a final decision. Photo by The Observer/PostmediaEnbridge Inc. is holding off on a new phase of expansion for Canada’s largest oil pipeline, which delivers Alberta crude into the United States Midwest. Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe Calgary company on Friday did not greenlight the second phase of improvements to the Mainline system and offered no timelines for a final decision. Greg Ebel, Enbridge’s chief executive, said in a release the project “has evolved into a broader suite of expansion opportunities.” He said the company is well positioned to provide export capacity “as greater clarity emerges around policies supporting production growth later this year.” Analysts spent the morning asking whether oil producers signed up to fill an expanded Mainline. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe project under scrutiny is called Mainline Optimization Phase 2. It is not a new pipeline. Enbridge would squeeze more oil through a pipe it already owns, using friction-reducing chemicals and upgrades to pumps and stations. Most of the work happens on land Enbridge already controls, which skirts years of hearings, landowner negotiations and court challenges that have stalled, delayed or outright stopped many other projects proposed in Canada. Enbridge is pressing ahead with an American leg, moving oil from the Midwest to the Gulf Coast. The Canadian leg is the one on hold. Nate Heywood, managing director, equity research analyst at ATB Capital Markets, said in an interview Friday that oilsands producers do not have enough clarity on an agreement with the federal and Alberta governments on a proposed new pipeline to the West Coast. And he says they may not be ready to sanction new production. “They’re maybe not ready to make a positive final investment decision on their production-energy projects”, Heywood said. Producers also have somewhere else to put their barrels. Aaron MacNeil, an analyst at TD Cowen, said several have already committed volumes to competing projects, including South Bow Corp.’s proposed Prairie Connector line into the U.S. and additional capacity proposed for Trans Mountain’s pipeline to the West Coast. Those commitments are binding which leave producers with little room to move. “Even if it doesn’t go ahead, they have to wait and see what happens before they can commit those volumes elsewhere, MacNeil said. Neither analyst read today’s call as a retreat. “It was a disappointment, obviously,” MacNeil said. “But net-net, there’s lots of opportunity for everybody.” Heywood agreed. “It doesn’t necessarily mean production isn’t going to grow. It’s just a matter of speed,” he said. “Enbridge is still positioned to benefit in the long term. It’s just getting clarity from a policy basis.” MacNeil said the delay may say less about Enbridge than about how much bigger producers think they can grow. “Mainline Optimization 2 is a great project, and eventually it’s going to get done,” he said. “Maybe producers are saying, why don’t we try to get these more ambitious projects done while there’s a window of opportunity?” The decision came as Enbridge reported second quarter earnings of $1.4 billion, or 64 cents a share, down from $2.2 billion and a $1.00 a year earlier. The company blamed most of the drop on paper losses on financial hedges rather than the business itself and left its outlook at 97 cent dividends unchanged. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.