Company News

CORRECTED-Enbridge says working on easing pipeline capacity shortages

(Corrects paragraph 2 to say Mainline system ships about 1.2 million bpd)

Dec 11 (Reuters) - Canada’s largest pipeline operator Enbridge Inc said on Tuesday it was working on alternatives to ease the ongoing pipeline capacity shortage in the country and is in talks with shippers for a new agreement for its Mainline system.

Enbridge’s Mainline system runs from western Canada to the United States and ships about 1.2 million barrels per day (bpd).

Calgary-based Enbridge said it can increase pipeline capacity by 50,000 to 100,000 bpd on a short-term basis by the end of the first half of 2019.

Crude production in Canada is expanding faster than pipeline capacity, which has led to the Canadian crude benchmark Western Canada Select (WCS) trading at record lows compared to the U.S. benchmark West Texas Intermediate (WTI).

The discount has typically been around $15, but has widened in the past few months to trade at $40 to $50 below WTI.

Enbridge, which has aggressively sold assets as part of its debt reduction plan, said it has C$1.8 billion ($1.35 billion) worth of new investments.

The company also said it would increase its dividend by 10 percent for 2019 and expects a further 10 percent increase for 2020. ($1 = 1.3317 Canadian dollars) (Reporting by Shanti S Nair in Bengaluru; Editing by Shinjini Ganguli)