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05 17, 2012 by Reuters
Enbridge Inc kicked off one of the most sweeping expansions in its history on Wednesday, a C$3.2 billion ($3.2 billion)series of projects across its pipeline system aimed at moving western Canadian crude to Eastern refineries and preventing bottlenecks in the U.S. Midwest.
Enbridge, already the largest transporter of Canadian oil exports, said C$2.6 billion worth of the plan would support the reversal in flow direction of a pipeline between Sarnia, Ontario, and Montreal to move crude from the Alberta oil sands and North Dakota's Bakken Region beyond southern Ontario.
The massive initiative would include additions of capacity to the company's mainline in Canada and the U.S. Midwest with an in-service target of 2014.
It would be in addition to Enbridge's expansions in the U.S. Gulf Coast region, including the reversal of the Seaway pipeline between Cushing, Oklahoma, and Texas, due to start up this month with the aim of draining off a glut of supply at the storage hub.
"These two large programs have both come to fruition in the last six months, achieving the strategy of expanding access to new markets in North America for growing production from western Canada and the Bakken which we embarked on several years ago," Steve Wuori, president of the company's pipeline division, said in a statement. "Importantly, these initiatives utilize existing pipeline infrastructure that minimizes our construction footprint."
The developments come as Enbridge also seeks to win approval for its controversial Northern Gateway oil pipeline to Canada's West Coast, which would result in tar sands-derived crude being shipped by tanker to Asia and California.
As part of the "Eastern Access" initiative, Enbridge would expand a pipeline between Michigan and Ohio and reverse the flow of the 240,000 barrel a day Line 9 between Sarnia and Montreal back to the West-East direction it was initially designed for in the 1970s.
The company also said it plans to bolster the capacities of its Spearhead and Line 6B pipelines in the Midwest, currently the largest market for Canadian oil. This year the crude has been hit with deep discounts due partly to pipeline bottlenecks in the region.
In a separate development, the Calgary-based company said it plans to expand its mainline with a C$400 million project between Neche, North Dakota, and Flanagan, Illinois, near Chicago. It will spend C$200 million expanding the Canadian portion of that system. ($1=$1.01 Canadian)
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