|
Enbridge shifts course; sets its eyes on Texas With Northern Gateway bogged down, company turns to C$38 billion plan B, with heavy emphasis on delivering Canadian crude to Gulf GARY PARK For Petroleum News
Enbridge, Canada’s largest oil pipeline operator, is veering away from conflict zones and concentrating on expansion in the friendlier United States Gulf Coast region.
In laying out the company’s Plan B, Chief Executive Officer Al Monaco told an investor conference in Toronto that Enbridge hopes to spend about C$38 billion over the next four years, with the major emphasis on taking advantage of the unprecedented investment opportunities in serving the 8 million billion barrels per day refinery region on the Gulf Coast.
“We are in the early stages of developing a regional business plans that envisions an expanded terminal involvement in the regional pipeline connectivity, access to import and export dock capability and ideally provides increased opportunities for customers committed to capacity on our Mainline and U.S. Gulf Coast access pipelines,” said liquids pipeline President Guy Jarvis.
Monaco said the plan “for the interim timeline is to offer these low-cost expansions on an incremental basis.”
However, he cautioned that many of the opportunities “come with a higher degree of risk,” but did not elaborate on that point.
Twinning existing lines In addition to twinning existing oil pipelines to provide producers with new transportation capacity as they struggle to cope with low oil prices, Enbridge is also targeting natural gas pipelines and power generation, Monaco said.
The oil transportation program is vital as Alberta oil sands producers gear up to start pumping 800,000 bpd of new production, led by Suncor Energy’s Fort Hills project, and include the company’s 24-inch Norlite pipeline that will provide diluent to facilitate the transportation of bitumen.
Beyond those projects nearing startup, the next generation of oil sands projects is uncertain, Jarvis said.
“Clearly the pace of oil price recovery could have a longer term impact on our growth plans,” he said.
“We’ve seen a number of large customers working on the next generation projects, but the timing of their final investment decisions is unclear,” Jarvis said.
Gulf Coast connections Enbridge has spent the last few years adding to its Gulf Coast connections through its Flanagan South and Seaway Twin projects, which can deliver 585,000 bpd of crude from Western Canada to the Gulf Coast.
Further relief is expected to come on-stream late this year when the 300,000 bpd Line 9 and Line 9B links open new refinery outlets in Ontario and Quebec.
Left off Enbridge’s strategic plan for the next four years at least is the Northern Gateway project, designed to carry 525,000 bpd of oil sands bitumen and connect Canada with Asian markets for the first time.
It has become bogged down in legal and political disputes, which Enbridge executives concede face more work that will “take some time” to complete.
While its core oil transportation business deals with price and regulatory challenges, Enbridge is planning to its gas pipelines and power generation, as well as testing the LNG industry with a minority stake in a floating liquefaction project in the Gulf of Mexico.
Gregor Harper, president of the company’s gas pipelines and processing business, said Enbridge can only grow its gas operations “to a certain size ... to get to the scale that we’d like to see (with gas) we’ll have to have some other sizable investments.”
| 