Enbridge takes ownership of U.S. pipeline
Enbridge has locked up total ownership of a U.S. pipeline that forms a vital link in its plans for eventually delivering oil sands production to Gulf Coast refineries.
The Calgary-based pipeline company paid US$12.4 million to BP for the final 10 percent it did not already own of what is now the Spearhead pipeline.
The majority stake cost Enbridge US$112 million in 2003, leaving it with an option to acquire the remainder.
Earlier this year the company obtained approval from the U.S. Federal Energy Regulatory Commission to reverse the flow of the now unused 650-mile pipeline from Cushing, Okla. to Chicago.
It is aiming to complete the reconfiguring work in the first quarter of 2006, offering initial capacity of 125,000 barrels per day to offer a “more varied grade mix of crudes with physical characteristics that will be available for the first time to refineries in Kansas, Texas and Oklahoma.”
Enbridge has said the line could be expanded to 160,000 bpd.
It also has FERC permission to offer discounted shipping rates to help offset “dwindling U.S. oil supplies and … increase refineries’ security of supply.”
—Gary Park
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