Enbridge expanding crude oil terminals

Enbridge has earmarked spending of C$1.5 billion as it embarks on a vigorous program of building crude oil terminals.

The extension of the company’s core pipeline business will start with a C$250 million facility at Hardisty, Alberta, including 16 tanks ranging in size from 250,000 to 530,000 barrels. Initial capacity of 5 million barrels is scheduled to start service in September 2008.

The new facility is close to Enbridge’s 50 percent-owned Hardisty Caverns partnership and, like that facility, will be offered on a long-term contract fee-for-service basis.

Chief Executive Officer Pat Daniel said the new terminal is a “key piece of our broader terminal development initiative. This is a significant new growth opportunity.”

He said the demand for terminals is “very strong” because of rising oil sands production, seasonality of markets and greater price volatility.

Enbridge currently has 15 million barrels of tankage under long-term contract, with another 30 million barrels under development at eight locations spread through the chain from upstream to downstream.

Enbridge also announced that it is expanding the diameter of its Southern Access pipeline to 42 inches from 36 inches, offering another 400,000 barrels per day by 2009 from Superior, Wis., to Chicago.

—Gary Park