CORRECTED-UPDATE 2-Enbridge raises Line 3 replacement cost estimate by $1.1 bln

(Corrects currency to U.S. dollars from Canadian dollars in headline, value of capital cost estimate in paragraph 5)

Feb 12 (Reuters) - Enbridge Inc on Friday forecast higher costs for its long-contested pipeline replacement project, citing regulatory and permitting delays, winter construction and COVID-19 protocols, among other reasons.

Line 3, built in the 1960s, ships crude from a Canadian oil hub in Edmonton, Alberta, to U.S. Midwest refiners, and carries less oil than it was designed for because of age and corrosion. Replacing the pipeline would allow Enbridge to roughly double its capacity to 760,000 barrels per day.

While the Canadian portion is complete, Enbridge has run into repeated obstacles in Minnesota, where reviews have lasted for about five years.

The updated cost also comes at a time when U.S. President Joe Biden has canceled the permit needed to build TC Energy Corp’s Keystone XL oil pipeline in a blow to Canada’s oil sector, which had already been depressed for years due to high production costs and carbon emissions.

Enbridge now estimates capital costs for the Line 3 replacement project, including the Canadian segment already in service, at $8.18 billion up from $7.08 billion. The increased costs are on the U.S. portion of the pipeline.

Calgary, Alberta-based Enbridge said it targeting to put the pipeline in service in the fourth-quarter.

The company, which also missed estimates for quarterly profit on Friday, said volumes on its liquids mainline were impacted by reduced refinery demand.

On an adjusted basis, Enbridge earned 56 Canadian cents per share, while analysts had expected 61 Canadian cents per share, according to IBES data from Refinitiv. ($1 = 1.2738 Canadian dollars) (Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips, Shailesh Kuber and Jan Harvey)