UPDATE 3-Enbridge plans new U.S. oil line, profit dips

Fri Feb 15, 2013 2:10pm EST
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* 50-50 project to cost C$2.4 bln-$3.4 billion

* To move up to 660,000 bpd of oil to Louisiana

* In service target 2015

* Fourth-quarter profit drops 8 percent

By Jeffrey Jones

CALGARY, Alberta, Feb 15 (Reuters) - Enbridge Inc said on Friday it is teaming up with Dallas-based Energy Transfer Partners in the latest conversion of a natural gas pipeline to transport oil, a $3.4 billion project to move large volumes of Canadian crude to Louisiana refineries.

Calgary-based Enbridge, which also reported an 8 percent dip in fourth-quarter profit, said the conversion should help reduce the deep discount on heavy Canadian crude that has pressured producer profits and hurt the economies of Alberta and Canada.

That wide spread between the price of Alberta's oil sands-derived crude and U.S. benchmark light oil is due to growing production and limited capacity to move the crude to markets.

Under the plan, the 50-50 partners would ship 420,000-660,000 barrels a day of Canadian and North Dakota oil to St. James, Louisiana from Enbridge's pipeline network in southern Illinois. That system is undergoing C$15 billion ($15 billion) worth of expansions.   Continued...