Enbridge Inc (TSX:ENB)(NYSE:ENB) got some good news on Thursday as its Line 3 pipeline received approval from the Minnesota Public Utilities Commission. The company will now be able to replace its old pipeline and of key importance is that the route that was approved was also similar to what Enbridge was hoping for, meaning it’ll likely remain feasible.
While appeals could be filed and permits are still required, the last major hurdle has been cleared. The pipeline replacement is necessary for Enbridge as it currently can transport only half of its capacity.
While environmentalists were not happy with the decision, it did come with the condition that Enbridge would have take on the financial responsibility for any spills or environmental damage caused by the pipeline.
Enbridge was up 3.7% on the day as the stock got a boost on the news. In the past 12 months, its share price has declined 20% as even a rising price of oil has not been enough to lift Enbridge out of its free fall.
Thursday’s news will hopefully be the start of a turnaround for a stock that has been trading at only a little more than its book value. It’s also good news for the industry, which in Canada has continued to struggle and there hasn’t been much reason to be bullish on oil and gas stocks lately.
Enbridge has been able to turn a profit in each of the past five quarters despite its struggles, and with a dividend north of 6%, it’s a great long-term buy for investors.
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