Update: Enbridge plans U.S. oil export expansion {export from Canada to US}

Calgary Herald ^ | JANUARY 4, 2013 | DAN HEALING

[thackney]

A proposed pair of projects worth $600 million will pump an additional 230,000 barrels per day of oil through existing pipelines from Alberta to Wisconsin.

In a news release Friday, Calgary-based Enbridge Inc. announced a $400-million expansion of the Canadian main line system between Hardisty, Alta., and the U.S. border designed to add capacity through increased horsepower at pumping stations.

Meanwhile, Enbridge Energy Partners of Houston announced a $200-million expansion of its Lakehead System between Neche, N.D., and Superior, Wisc. to allow the same 230,000-bpd capacity increase by the same method on the south side of the border.

Both expansions require regulatory approvals but Enbridge is seeking an amendment to its existing presidential permit to avoid the delays TransCanada Corp.’s Keystone XL pipeline has suffered in its quest to obtain the U.S. federal approval required for a cross-border line.

“We anticipate that the Department of State will conduct its review of the capacity expansion project in parallel with reviews that will be required by other agencies,” said Enbridge spokesman Graham White.

“As the capacity expansion of Line 67 is to an existing pipeline and the impacts are limited to additional pumping equipment at existing Enbridge sites, the environmental and public impact is minimal, so we do not expect the scope or duration of regulatory review that is similar to XL, which creates a new pipeline corridor.”

He said the expanded capacity would be taken up primarily by increasing heavy crudes such as oilsands bitumen from northern Alberta but could also include light oil from the North Dakota Bakken.

Both projects would be accomplished without adding to the pipe in the ground.

“Part of the expansion is to increase the pressure on the line so that the output pressure at existing stations allows for increased rates of flow,” he said.

“But the pipelines were designed and tested for these planned expansions during construction.”

He said the normal maximum allowed pressure for quarter-inch steel lines of such diameter is 1,000 pounds per square inch.

The Canadian main line and the Lakehead expansion have been approved by shippers, the companies said, and both are expected to be in service in 2015.

Steven Paget, an analyst for FirstEnergy Capital, said the projects fill in a capacity gap in Enbridge’s long list of expansion projects.

“This was not in our estimates so it’s positive for Enbridge,” he said.

He added that Enbridge’s total capital commitment will be $520 million, with the partnership contributing $80 million.

The Lakehead expansion is to be 60 per cent funded by Enbridge Inc. and 40 per cent by the partnership, although the latter will have the option to increase or decrease its economic interest by up to 15 per cent.

Enbridge operates the world’s longest crude oil and liquids pipeline system in North America.

In November, it said it was planning a $1.8-billion pipeline between Edmonton, a key oilsands hub, and Hardisty. That new line will initially be able to carry 570,000 barrels per day but has the potential to be expanded to 800,000 barrels.

Construction could begin as early as the first quarter of 2014, with startup targeted for mid-2015.

In December, Enbridge and its U.S. affiliate announced they were spending $6.2 billion on a string of projects to bring growing volumes of Alberta and North Dakota light oil to market.

The light oil market access program will see an additional 400,000 barrels per day of light oil flow to refineries in Ontario, Quebec and the U.S. Midwest.

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