Enbridge expands N America crude pipeline access
Enbridge on Monday announced a pair of projects that will provide increased access for refineries in the US Midwest and in Ontario, Canada, to light crude oil produced in the western US and Canada.
The project involves the expansion of the company’s Line 5 light crude line between Superior, Wisconsin, and Sarnia, Ontario, by 50,000 bpd, at a cost of approximately $100 million.
Complementing the Line 5 expansion, Enbridge also plans on reversing a portion of Line 9 in western Ontario to permit crude oil movements eastbound from Sarnia as far as Westover, Ontario, at a cost of approximately $20 million.
Subject to regulatory approvals, both projects are targeting to be in service in late 2012.
The expansion of Line 5 and reversal of Line 9 between Sarnia and Westover can be economically achieved with upgrades or modifications of facilities and does not require installation of new pipeline, the company said.
The project will enable growing light crude production from the Bakken shale and from Alberta to meet refinery needs in Michigan, Ohio and Ontario.
The project provides another much needed transportation outlet for light crude, mitigating the current discounting of supplies in this basin while also providing more favourable supply costs to refiners currently dependent on crudes priced off of the Atlantic basin, the company said.
"We are pleased to be able to provide this high value solution to our shippers," said Stephen J. Wuori, president of liquids pipelines for Enbridge. "With a Brent-to-WTI differential running in excess of $20 per barrel, compared with the historical parity relationship, there is significant value to be captured by increasing the pipeline capacity to move western Canadian and Bakken light crude supply to eastern refiners.
“This project will utilize the international joint toll (IJT) feature provided for in the new Enbridge Competitive Toll Settlement, which will enable us to provide an attractive toll from western Canada all the way through to refiners in the US upper Midwest and Ontario,” he added.
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