CALGARY, Alberta (Reuters) - Enbridge Inc plans to hold an open season for 85,000 barrels per day of capacity on its 180,000 bpd Southern Lights pipeline, which carries U.S. ultra-light crudes and natural gas liquids from Illinois to Alberta for blending into tarry oil-sands bitumen.
The company said in a filing with the Federal Energy Regulatory Commission that two existing customers on the line have the first right to make a binding commitment for the available space. They have until June 22 to make a decision.
After that, other shippers will be able to bid on any remaining capacity not requested by the two existing customers.
Southern Lights, completed in July, 2010, runs 1,588 miles from the outskirts of Chicago to Edmonton, Alberta, carrying the diluent that’s needed to blend into thick bitumen so that it can flow on pipelines.
By 2025, the Canadian Association of Petroleum Producers expects oil sands output to reach 3.7 million barrels per day, of which 3.3 million barrels will be bitumen requiring 1 million barrels of diluent in order to flow, up from 275,000 bpd last year.
To meet that need, other companies are also taking steps to increase shipments of U.S. diluent to Canadian oil sands producers. Kinder Morgan Energy Partners last month launched a binding open season to gauge interest in moving about 75,000 bpd of light natural-gas condensates to the oil sands by reversing its Alberta-to-Illinois Cochin pipeline.
Enbridge said in its filing the open season was for “additional committed capacity on the initial capacity” of Southern Lights but did not specify if it plans to expand the line.
The company could not be immediately reached for comment.
Reporting by Scott Haggett; Editing by Bernard Orr