Enbridge to spend C$7 billion to replace pipeline to U.S
By Nia Williams
CALGARY, Alberta (Reuters) - Canada's No. 1 pipeline company, Enbridge Inc (ENB.TO: Quote), will nearly double capacity on a major crude export line to the United States through a C$7 billion ($6.3 billion) replacement program, the largest project in the company's history.
Enbridge, whose pipelines carry the bulk of Canada's crude exports to the United States, intends to replace all segments of pipeline on Line 3 between Hardisty, Alberta, and Superior, Wisconsin, by the second half of 2017.
By replacing the existing 34-inch diameter pipeline with 36-inch high-strength steel pipe, Enbridge said the line will be able to run at a maximum capacity of 760,000 barrels per day. It currently runs at 390,000 bpd because of pressure restrictions imposed on the line by regulators.
However, Enbridge Chief Executive Al Monaco said overall capacity on the Enbridge mainline system between Western Canada and the United States will not change as the system is already in balance.
Instead, the project will help tackle bottlenecks and introduce some flexibility into the system, giving Enbridge the option to switch crude from other lines into Line 3.
"What the Line 3 replacement does is provide our customers with enhanced reliability and assurance of moving anticipated end-of-decade throughput levels on our system of 2.6 million barrels per day," Monaco said on a conference call.
"You can think of this project as a buffer to deal with unplanned disruptions and maintenance and additional scheduling flexibility that shippers need."
The Canadian part of the replacement project between Hardisty and Gretna, Manitoba, will cost about C$4.2 billion, while the U.S. part between Neche, North Dakota, and Superior, is estimated to cost US$2.6 billion. It will be undertaken by Enbridge Energy Partners LP (EEP.N: Quote), the company's U.S. affiliate. Continued...