Although it found no significant damage, Enbridge Inc. and Enbridge Energy Partners LP said Monday that clean up and inspections following Hurricane Rita will be costly and may take several weeks or longer on the UTOS and Stingray facilities, among others. Enbridge Inc. expects a total net earnings impact of C$5 million (US$4.29 million), while Energy Partners expects a C$2 million (US$1.72 million) reduction in net income.

Energy Partners said the offshore UTOS pipeline system, which comes ashore in western Louisiana and was in the direct path of Hurricane Rita, had some minor flooding damage to electrical equipment and process controls that will require repairs over the next few weeks. However, Energy Partners found no “material structural damage to pipeline integrity or onshore facilities,” including onshore gas transmission and processing systems in Texas and Louisiana.

Energy Partners said its other gathering and processing operations were indirectly affected by storm-related third-party facility disruptions that temporarily curtailed gathering of unprocessed gas at processing plants. “We mitigated the impact and avoided extensive gathering and processing system shutdowns by arranging for gas liquids to be trucked out of plants and by working with interconnecting natural gas pipelines to manage natural gas quality at major receipt points,” the company said in a statement.

Enbridge Inc. said it also found “no material incremental damage from Hurricane Rita” to its five major offshore pipeline corridors, which were flowing about 2.7 Bcf/d prior to Katrina: Mississippi Canyon (Capacity 800 MMcf/d)), Garden Banks (1 Bcf/d, plus 250 MMcf/d on Magnolia), Green Canyon (includes Nautilus, 600 MMcf/d; Manta Ray, 800 MMcf/d; and Cleopatra, 500 MMcf/d), Stingray (1,120 MMcf/d, plus 275 MMcf/d on Triton) and Destin (1.2 Bcf/d).

However, four of the corridors were not receiving any gas production on Friday — Destin was back up to about 350 MMcf/d. And the Stingray system may be down for several months for repairs of minor equipment damage and damage to downstream processing, i.e., Williams’ Cameron Meadows gas processing plant (500 MMcf/d) near Johnson’s Bayou. The Mississippi Canyon system (800 MMcf/d) also could be down much longer because of damage to Dynegy’s Venice gas processing plant.

“No major structural damage appears to have occurred at the onshore Stingray dehydration and compressor facilities,” Enbridge said. “However, due to flooding, the electrical, control equipment and office buildings require repairs that we believe can be completed by year-end 2005,” the company said. Enbridge said it also will continue sonar inspections of its underwater pipe to assess sediment support and cover.

Significantly affecting its recovery and the recovery of most companies in the region was the impact of Katrina and Rita on the living conditions of employees. Enbridge had over 400 employees in the region that were subject to mandatory or voluntary evacuations, said Enbridge CEO Patrick D. Daniel. “While the impact from Hurricane Rita was less than the worse initial predictions, we are concerned for the towns and parishes that were affected and for those employees who live in the coastal areas most impacted by the hurricane and sustained damage to their homes.” He said the company would continue to provide assistance to the affected employees.

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