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Enbridge dispatches gas pipeline head to scene of fatal Ky. blast

Enbridge Inc. has dispatched a team that includes the president of its gas transmission business to the site of a fatal explosion on its Texas Eastern pipeline system in Kentucky.

Bill Yardley, president of Gas Transmission and Midstream, is at the site of a massive explosion in Lincoln County, Ky., that killed one person and injured five others, CEO Al Monaco said on an Aug. 2 conference call. The blast, which occurred early on Aug. 1, sent a fireball 300 feet in the air, destroyed railway tracks and caused the evacuation of a nearby mobile home park, according to reports. The Calgary, Alberta-based company said it had isolated the affected portion of the Texas Eastern system, which can transport 13 Bcf/d along 8,835 miles of pipe that travel from the U.S. Gulf Coast through the mid-Atlantic and on to the Northeast.

"Our hearts go out to the family and the community," Monaco said on the call to discuss second-quarter earnings. "Our first concern, of course, is for those impacted so we've mobilized resources to assist and support them. Secondly, we're working with federal agencies to investigate what happened and how the learnings can improve our approach."

Representatives of the federal Pipeline and Hazardous Materials Safety Administration were on the scene of the blast along with officials of the state regulator. It was the second blast on the system this year. Texas Eastern Transmission declared force majeure on the system south of the Danville Compressor Station. The company did not indicate when service would be restored.

Enbridge posted strong second-quarter numbers driven by high utilization of its Canadian and U.S. pipeline networks, Monaco said. High liquids throughput, particularly in the Midcontinent region, helped the company achieve record second-quarter EBITDA and distributable cash flow, a key operating metric for pipeline companies. Enbridge's mainline system, which carried an average 2.66 million barrels per day of Canadian crude to U.S. markets, will get a boost with 85,000 bbl/d of added capacity the company will be able to deliver in late 2019. The added capacity was achieved through optimization of flows at delivery and receipt points, Monaco said.

The company has extended indefinitely the timeline for completion of its C$9 billion Line 3 replacement project, which has been stalled by legal challenges in Minnesota. While the portion of the line through the state has been approved by the state public utilities commission, known as the PUC, environmental groups successfully argued in court that a portion of the project's environmental impact statement should be redone. The PUC has not set a timeline for reconsideration of the process pending an appeal of other issues raised in the initial court challenge. Enbridge has completed the Canadian segment of the project, which sits idle pending completion of the North Dakota and Minnesota legs.

In Michigan, where the state's governor has called for the shutdown of Enbridge's Line 5 conduit, the company continues to press ahead with geotechnical work on a proposed tunnel under the Straits of Mackinac. Gov. Gretchen Whitmer's administration has challenged the tunnel's approval, which was granted in the dying days of the previous administration. The state has also filed suit to shut the 540,000 bbl/d pipeline down for safety reasons.

"Hopefully we can put all the legal wrangling aside on work on collaboration with the state to get the project done as quick as possible," Monaco said.

Discussions are underway in a separate Line 5 dispute with a Michigan Native American group over an easement through its land. "We expect to reach positive outcomes on the Line 5 issues in the near term," he said.