New pipeline would provide U.S. refiners with more crude from Alberta’s oil sands

Petroleum News

Enbridge Energy Partners L.P. has unveiled plans for a crucial new link in its pipeline system to make more Canadian crude from Alberta's prolific oil sands available to refiners in the U.S. Midwest and Midcontinent.

Enbridge said Oct. 6 that pending support from oil shippers and approval from regulators, it intends to build a 630-mile crude pipeline from its terminal at Superior, Wis., to the Wood River hub in southern Illinois.

The new pipeline would have an initial oil capacity of 250,000 barrels per day and would cost between $550 million and $650 million, Enbridge said. It would connect with the Spearhead pipeline project being developed by Enbridge, allowing shippers on the line to access market hubs at Chicago, Wood River or Cushing. The new line is expected to be in service in 2007.

Actually, the new line and Spearhead Pipeline “are both facets of a broader” Enbridge strategy to provide improved access to growing Canadian crude supplies for U.S. refiners, the company said.

In early September, Enbridge completed the acquisition of a 90 percent stake in the Cushing to Chicago pipeline system, renamed Spearhead, from BP for $122 million. Enbridge said it intends to reverse the line to north to south flow by 2004.

“The proposed Southern Access Pipeline represents a concrete step in furthering continental security of energy supply,” said Dan Tutcher, president of the partnership's management company and general partner. “Refiners and their customers in the U.S. Midwest and Midcontinent will benefit from improved access to secure, reliable and growing supplies of crude oil from the Alberta oil sands.”

Of the estimated 180 billion barrels of Canadian oil reserves, Alberta's oil sands make up to 174.8 billion barrels, according to the U.S. Energy Information Administration.