UPDATE 1-Enbridge plans new C$1 bln pipeline to carry diluent

Tue Oct 1, 2013 2:53pm EDT
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* Expanding diluent pipelines

* Revamping plans for North Dakota pipeline

* Shares down 1.4 pct

By Scott Haggett

CALGARY, Alberta, Oct 1 (Reuters) - Enbridge Inc said on Tuesday it plans to build a new C$1 billion ($972.86 million) pipeline to carry 200,000 barrels per day of diluent, or thinning agent, from Edmonton, Alberta, to oil sands operators near Fort McMurray, Alberta.

Enbridge, Canada's No. 1 pipeline company, said the planned Norlite line may be expanded to carry 300,000 bpd should it receive enough support from oil sands producers, who blend the diluent into heavy oil so it can flow in pipelines.

Enbridge is in the midst of a major expansion of its pipeline network, which carries the bulk of Canada's crude exports to the United States, to accommodate rising production from Alberta and North Dakota's shale-oil fields and to move that oil to new markets on the Gulf coast.

"You're seeing essentially a reconfiguring of the (oil) transportation grid in North America," Al Monaco, Enbridge's chief executive, said at the company's annual investment conference. "

While North Dakota's light oil can move directly onto Enbridge's pipelines, bitumen from the oil sands must be blended with diluent. With production from the northern Alberta region expected to climb by 1 million barrels per day, to 4.9 million bpd by 2020, according to industry forecasts, new diluent supply is critical for producers.   Continued...