Two Enbridge Inc. affiliates are spending about $582-million on a pipeline expansion to accommodate higher volumes of crude from a promising energy region around the Canada-U.S. border.
The pipeline giant's U.S. affiliate, Enbridge Energy Partners LP is contributing around $370-million (U.S.) for the U.S. projects, while its Canadian counterpart, Enbridge Income Fund , is spending $190-million (Canadian) for its share in Canada.
"We anticipate substantial further production growth based on discussions with producers, and our own regional supply analysis," said Steve Wuori, the Enbridge executive in charge of liquids pipelines.
"We are well positioned to provide shippers with attractive transportation options based on our extensive existing operations in the region."
The system taps into the Bakken and Three Forks formations, which stretch through parts of Saskatchewan, Montana and North Dakota. In recent years, horizontal drilling and other techniques have boosted production from tough-to-access oil pools in that area.
The expansion will increase takeaway capacity from the region by 145,000 barrels per day, which can readily be expanded to 325,000 barrels per day at a relatively low cost. The expansion is expected to be completed in early 2013.
The project announced Tuesday will start in the heart of the Bakken, near Tioga, N.D., and end at an Enbridge mainline terminal at Cromer, Man.
In January, Enbridge completed a 51,000 barrel per day expansion to its North Dakota System. Three separate projects in Saskatchewan will increase capacity there by a total of 125,000 barrels per day later this year.
"We are confident that this series of expansions will relieve much of the current demand for pipeline capacity out of the Bakken and Three Forks production areas as well as provide the foundation for timely future expansions to meet the needs of the region", said Mr. Wuori.
Enbridge Energy Partners and Enbridge Income Fund are affiliates of Calgary-based Enbridge Inc. Canada's largest crude transporter and natural gas distributor.
Enbridge owns 27 per cent of the U.S. pipeline operator and has a 72 per cent economic interest in the Canadian affiliate, and manages the day-to-day operations of both.
Enbridge, with 4,500 employees, operates the world's longest crude oil pipeline and Canada's largest natural gas distribution company through Enbridge Gas Distribution Inc., which has nearly 1.6 million residential, commercial and industrial customers in Ontario, Quebec and upper New York State.
The company also has natural gas gathering, processing and transmission businesses as well as international energy projects, liquids marketing, electric power distribution, and retail energy products and services.