By Nia Williams
CALGARY, Alberta (Reuters) - Two new crude oil export pipelines will provide enough capacity to ship Canadian production to market until at least the mid 2020s, Enbridge Inc (Toronto:ENB.TO - News) Chief Executive Al Monaco said on Friday, making clear his company's Line 3 should be one of them.
Monaco's comments come amid growing speculation that Canada faces pipeline overbuild after years of struggling with limited market access.
The Canadian government approved Enbridge's Line 3 replacement project and Kinder Morgan's (NYSE:KMI - News) Trans Mountain expansion last November, while U.S. President Donald Trump invited TransCanada (Toronto:TRP.TO - News) to reapply for a Keystone XL permit in January. TransCanada is also awaiting permits for its proposed Energy East project.
If all four pipelines get built the 2.1 billion barrel per day surge in capacity would fast outpace industry forecasts of Canadian crude production growth of 850,000 bpd by 2021.
"If you look at the supply profile and you look at our expansion replacement capacity for Line 3 and one other pipeline, that should suffice based on the current supply outlook, out to at least mid-next decade," Monaco said on a fourth quarter earnings call.
Monaco said Enbridge had another 400,000 bpd of potential capacity expansion opportunities in addition to Line 3 but the company would be guided by the amount of supply coming out of western Canada.
Wood Mackenzie analyst Mark Oberstoetter said his firm agreed with Monaco's assessment on the need for new pipelines.
"We definitely need two of these pipelines by around 2025 and after that it depends on the supply outlook," Oberstoetter said. "There's not an evident need to get three or four pipelines built."
Enbridge, Canada's largest pipeline company, also announced a C$1.7 billion ($1.3 billion) investment in a North Sea windfarm.
The 50 percent ownership in EnBW's (:EBKG.DE) Hohe See strengthens Enbridge's footprint in Europe's booming offshore wind power industry.
Monaco said there could be more to come given the push towards renewable energy in a number of European countries.
Enbridge reported fourth-quarter profit on Friday that included a C$373 million before-tax impairment charge related to its Northern Gateway pipeline, which the Canadian government blocked last year.
Earnings attributable to the company's shareholders were C$365 million ($279 million), or 39 Canadian cents per share, in the fourth quarter, hurt by charges, including for asset impairment and restructuring.
($1 = 1.3110 Canadian dollars)
(Additional reporting by Arathy S Nair in Bengaluru; Editing by Savio D'Souza, Grant McCool and Bernard Orr)