Enbridge Files Commercial Terms for Alberta Clipper Mainline Expansion Project

abarrelfullabarrelfull wrote on 09 Oct 2012 08:50
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June 28, 2007) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) (Enbridge) announced today that its wholly owned subsidiary, Enbridge Pipelines Inc. (EPI), has filed a commercial supplement to its application to the National Energy Board (NEB) to construct the CDN $2.0 billion Canadian section of the Alberta Clipper Mainline Expansion Project (2007 dollars, excluding allowance for funds used during construction (AFUDC)).

The supplement sets out the tolling principles and risk and return parameters agreed to with shippers and is accompanied by a letter of support from the Canadian Association of Petroleum Producers. Enbridge's affiliate, Enbridge Energy Partners, L.P. (NYSE:EEP) plans to file a similar set of toll principles with the Federal Energy Regulatory Commission (FERC) for the US $1.0 billion U.S. section of the project in 2008 (2007 dollars, excluding AFUDC). The project remains subject to regulatory approvals and receipt of various permits in Canada and the United States.

The key terms of the Canadian tolling principles include a 45 per cent equity, 55 per cent debt capital structure with a floating return on equity equal to the NEB's multi-pipeline rate plus 2.25 per cent. EPI will share in the risk of capital cost overruns and share the benefits of capital cost savings by having a portion of any such variances excluded or included as applicable from the deemed rate base of the project. Further details of the tolling principles can be found in the supplement filed with the NEB and available on the NEB's website at www.neb-one.gc.ca.

The U.S. tolling principles include a 55 per cent equity and 45 per cent debt capital structure, but are otherwise similar to the Canadian tolling principles. Specifically, the U.S. tolls will include an allowance for income tax as permitted under FERC regulation over the term of the commercial agreement.

Alberta Clipper involves the construction of a new 36-inch diameter 1,607 kilometre (1,000 mile) crude oil pipeline from Hardisty, Alberta, to Superior, Wisconsin, generally within or adjacent to Enbridge's existing right-of-way. Alberta Clipper will have an initial capacity of 450,000 barrels per day (bpd) and allows for expansions to increase capacity up to 800,000 bpd. Pending regulatory approval, Enbridge anticipates bringing Alberta Clipper into service in mid-2010. Alberta Clipper will be integrated with, and form part of, the existing Enbridge system in Canada and the EEP Lakehead system in the U.S.


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