Canadian energy infrastructure giant Enbridge (TSE:ENB) just made a very big move, but one that was greeted with comparatively quiet applause from shareholders. It just sold off its interest in the Westcoast pipeline to a First Nations group, but shareholders found it an almost trivial benefit. Shares of Enbridge were up fractionally in Thursday morning’s trading as a result.
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Enbridge offered up a minority stake in the Westcoast natural gas pipeline system to the Stonlasec8 Indigenous Alliance Limited Partnership, who raised $715 million to buy in. For that $715 million, it will get a 12.5% stake in the pipeline, which runs natural gas from Fort Nelson and Gordondale to the border between Canada and the United States.
The president and chairman of Stonlasec8, who also serves as chief of the Squiala First Nation, Chief David Jimmie, noted that the Westcoast pipeline was a “legacy asset” that had been working in its territories for the last 65 years, and then some. And with its minority stake in said pipeline, now the Nations in question would receive a share of the benefits derived from that asset. Said benefits, reports noted, would be funneled into several projects ranging from housing to infrastructure.
EPA on Enbridge’s Side
One of the most controversial projects that Enbridge has been involved in of late is the Line 5 project, which is running through the northern United States, around Lake Superior. And several have come out against it, including a northern Wisconsin tribe, the Bad River Band of Lake Superior Chippewa. But a new report out from the Environmental Protection Agency (EPA) suggests that these concerns are largely unfounded.
The Chippewa objected to a proposed rerouting of Line 5, citing elements of the Clean Water Act. But the EPA’s reports suggested that the project would not, in fact, violate water quality. But the tribe in return noted that the agency did not consider its standards, which are, admittedly, a bit more amorphous and involve such things as the “spirit” of the water.
Is Enbridge Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:ENB stock based on six Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 23.47% rally in its share price over the past year, the average TSE:ENB price target of C$66.85 per share implies 7.52% upside potential.
