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Enbridge raises pipeline stakes Hikes capacity of Flanagan South, Seaway pipelines to open Texas refinery markets for Alberta oil sands, Bakken crude production Gary Park For Petroleum News
Enbridge is edging ahead of rival TransCanada in the race to deliver crude from the Alberta oil sands and North Dakota Bakken to Texas Gulf Coast refineries.
Following through on hints only a month ago, Enbridge announced March 26 it is embarking on a major expansion of its two proposed pipelines from the Chicago area to Texas to a possible 1.65 million barrels per day from the earlier capacity of 1.03 million bpd.
The plans include hiking capacity on its wholly owned Flanagan South system from Flanagan, Ill., to the oil hub at Cushing, Okla., from an original 400,000 bpd to 550,000 bpd by increasing the pipeline diameter to 36 inches from 30 inches and providing for a further hike in volumes to 800,000 bpd.
The overall cost of Flanagan South has climbed to $2.8 billion from $1.9 billion and is expected to be in service by mid-2014.
Shipper commitments to Flanagan South cover terms of 5 years to 20 years, confirming remarks a month ago by Enbridge Chief Executive Officer Pat Daniel of strong interest during an open season that was briefly extended.
Seaway targeted for expansion A joint venture by Enbridge and Enterprise Products Partners, the Seaway line from Cushing to Freeport, Texas, is now targeted for an expansion to 850,000 bpd from earlier plans to start service on June 1 at 150,000 bpd, building to 400,000 bpd by early 2013. Enbridge’s share of the costs is estimated at $1 billion.
Enbridge said a separate 200,000 bpd pipeline from the ECHO terminal in Houston to the refining hub at Port Arthur, Texas, is expected to come on line in early 2014, depending on results of an open season that closes April 13.
Daniel said in a statement that the additions to Seaway and Flanagan South will give crude oil producers in the Bakken region and “other emerging crude oil sources capacity to move secure, reliable supply to U.S. Gulf Coast refineries, offsetting supplies of imported crude” and strengthening North America’s energy security “into the foreseeable future.”
He said that upsizing Flanagan South, combined with Enbridge’s existing Spearhead pipeline, will offer shippers 775,000 bpd of capacity from Flanagan to Cushing.
Heavy crude proportion unknown Enbridge officials have previously said they and Enterprise were still analyzing what proportion of throughput on Seaway would be heavy crude, which would reduce capacity on the line, but outlets are seen as vital if, as predicted, oil sands output doubles to 3 million bpd by 2020, especially given the opposition to Enbridge’s Northern Gateway and Kinder Morgan’s planned doubling of capacity on its Trans Mountain system, both targeted at markets in Asia and the U.S. West Coast.
By “leveraging existing infrastructure wherever possible, impacts to landowners, communities and the environment will be minimized,” Daniel said in an indirect reference to the problems TransCanada’s has encountered with its proposed Keystone XL pipeline from Alberta to Texas.
President Barack Obama has pledged to accelerate approval of the southern leg of XL from Cushing to the Gulf Coast.
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