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Enbridge weighing its options

The company said it's open to mergers as a 63-year-old asset in Michigan comes under pressure.

By Daniel J. Graeber
Enbridge weighing its options
Pipeline company Enbridge said it's vetting its options for its natural gas business at the same time as it trims spending guidance for the year. Photo by tcly/Shutterstock

HOUSTON, May 2 (UPI) -- Pipeline company Enbridge said spending for 2016 would be significantly lower than in past years, though it maintained it's positioned well in North America.

Enbridge Energy Partners said its operating revenue for the first quarter of the year was $1.06 billion, against $1.43 billion last term. Mark Maki, the company's president, said the results were in line with expectations, adding new infrastructure online in eastern Canada and in the U.S. Midwest led to an increase in deliveries.

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With a position in the Bakken shale play in North America and in emerging markets in Western Canada, Maki said his company had a "high level of confidence" about its continued performance. Nevertheless, spending would be lower for 2016 than in recent years and the company was vetting a wide range of options for durability.

"The partnership has initiated a process to evaluate a range of alternatives for our natural gas business unit and we will update investors on this process when we have concluded the evaluation," he said.

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The company said mergers, joint ventures and reorganizations were among the options for its natural gas business.

The company last week faced pressure from a Michigan lawmaker concerned about the safety of a pipeline system running through the Straits of Mackinac. State Rep. Candice Miller introduced the Great Lakes Pipeline Safety Act, which could force the closure of the company's 63-year-old Line 5 pipeline system.

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"An ounce of prevention is worth more than a pound of cure," she said in a statement last week. "I understand many may consider this to be too drastic and costly a move, but I guarantee the price of inaction will be higher."

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If the pipeline burst, she said more than 700 miles of the shoreline of the Great Lakes could be impacted.

An Enbridge oil pipeline burst open in southern Michigan in 2010.

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