abarrelfull wrote on 16 Jan 2014 15:39
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June 29, 2005
Enbridge Inc. (NYSE:ENB) (TSX:ENB) and Enbridge Energy Partners, L.P. (NYSE:EEP) (the "Partnership") today commenced an Open Season to confirm shipper support for the Southern Access Mainline Expansion and Extension Program.
The expansion consists of up to three separate phases which, in aggregate, will provide an additional 400,000 barrels per day (bpd) of crude oil capacity on the Enbridge mainline system from Hardisty, Alberta to Chicago, Illinois, at a cost of approximately US$1 billion in 2005 dollars. The Southern Access extension will involve the construction of a new 30-inch diameter 300,000 bpd pipeline from a new interconnection with the mainline system, near Chicago, to hubs at Wood River and Patoka, Illinois, at a total cost of approximately US$320 million. The Program can also be completed as a single project, at a cost savings of US$120 million.
The Canadian expansion portion of the Southern Access Program from Edmonton to the international border near Neche, North Dakota, will be undertaken by Enbridge Pipelines Inc., the Enbridge subsidiary that owns the Canadian mainline system. The U.S. portion of the expansion program, from the international border to Chicago, will be undertaken on the Partnership's Lakehead system (the U.S. mainline system).
The Southern Access extension will be undertaken by a U.S. subsidiary of Enbridge and integrated with the U.S. mainline for rate-making purposes.
Details of the expansion and extension program are included on a fact sheet available on the Partnership's Web site.
The format of the Open Season with respect to the expansion program involves shippers signifying their support by executing a letter of support for Enbridge to initiate regulatory, permitting, and construction activity for one or more phases. The format with respect to the Southern Access extension involves shippers signifying their support by making five-year volume commitments on the new pipeline.
The first stage of the Open Season, from June 29 to July 25, 2005, will involve nonbinding expressions of interest in volume commitments. Following the nonbinding stage, Enbridge will review the results, consult with shippers and the Canadian Association of Petroleum Producers and, if appropriate, conduct the second, binding stage of the Open Season from August 15 to September 15, 2005.
Richard Bird, Group Vice President Liquids Pipelines for both Enbridge and the Partnership said, "The Southern Access Program is a key component of our overall plan to create value for our customers and offer growth and profitability for our investors. We are doing this by providing the additional pipeline infrastructure necessary to facilitate access to new markets for expanding supplies of crude oil from the Alberta oil sands. The Program is good for oil sands producers because it provides adequate capacity to accommodate their growing production and improves access to markets south and east of Chicago. It's also good for U.S. refiners because it enhances their access to a secure and expanding source of crude oil supplies.
"The Program provides our shippers with the lowest cost alternative for the capacity and market access they require, with the flexibility to phase in the capacity, as needed. We will provide the shortest possible transit times, lowest shipper investment in line-fill, minimal contractual commitments and greatest flexibility for storage and alternative delivery options."
The Southern Access Program is complementary to a number of projects undertaken by Enbridge in the last decade to provide access to new refinery markets for growing oil sands production. Specifically, Enbridge has extended market access to Canadian crude through the Mustang joint venture from Chicago to Patoka; the Toledo System from Stockbridge, Michigan to Toledo, Ohio; and the Spearhead pipeline reversal now in progress from Chicago to Cushing, Oklahoma.