Enbridge rides Bakken wave

Gary Park

For Petroleum News

Canadian pipeline company Enbridge is pulling out the stops to secure shipping commitments from North Dakota’s Bakken play, amid forecasts that the formation is on track to almost double output to 1 million barrels per day and could reach 2 million bpd in 10 years.

Already moving 275,000 bpd from the region by pipe and rail, Enbridge has announced open seasons involving almost 400,000 bpd of new capacity, about half of that flowing directly out of the Bakken.

Brad Sharma, vice president of market development, told a Platts North American crude marketing conference in Houston that Enbridge expects to start testing shipper interest in the second quarter for its proposed 225,000 bpd Sandpiper line from Beaver Lodge, N.D., to Superior, Wis.

From Superior, the Bakken crude could be moved south or east in the United States.

The targeted in-service date is between mid-2014 and mid-2015.

Enbridge and Enterprise Products Partners also said they will hold a supplemental open commitment period for incremental volumes on an 85-mile lateral from Houston to Port Arthur, Texas, to support their Seaway reversal project from Cushing to the Texas Gulf Coast.

The partners are offering an extra 200,000 bpd of capacity, which is designed to ease the bottleneck at Cushing, Okla., and allow crude from as far north as Bakken to reach Gulf Coast refineries.

The proposed new lateral has a scheduled in-service date of early 2014, while the 150,000 bpd Seaway reversal is due to start carrying crude in the second quarter of 2012.

In addition, Enbridge issued binding open seasons on Feb. 28 for both its Sanish pipeline and Bakken expansion program.

The 40-mile Sanish line is planned to carry 67,000 bpd of crude from Johnsons Corner, N.D., to Beaver Lodge, while the Bakken expansion is designed to offer 145,000 bpd from Beaver Lodge to Enbridge’s Cromer terminal in Manitoba, where it can connect with Enbridge’s mainline to the U.S. Midwest and Eastern Canada.

Both the Sanish and Bakken seasons end April 11.

As well Enbridge is building an 80,000 bpd rail facility in Berthold, N.D., which is expected to start service in about a year.

Enbridge liquids pipeline President Steve Wuori said the Bakken and Three Forks formations have “catapulted North Dakota into the position of being one of the leading oil producing states in the U.S.”

Pat Daniel, Enbridge’s chief executive officer who plans to retire later this year, said Enbridge is paying close attention to the development of tight oil and gas plays, pointing to the Bakken, Niobrara in Colorado, Eagle Ford in Texas and Utica in the eastern U.S. as locations that will be the “biggest determinants” of how and where new pipelines are built.

Steven Paget, an analyst with FirstEnergy Capital, said the crude flow from the Bakken is already creating bottlenecks between southeastern Wyoming, Cushing, Chicago and North Dakota.

UBS Securities analyst Chad Friess said delays in getting approvals for TransCanada’s Keystone XL pipeline means that any company with pipelines close to the emerging plays has a “huge first-move advantage. … The sky is the limit if the growth forecasts for the Bakken and other plays really come to fruition.”