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Posted on 08/22/2011 5:35:10 AM PDT by thackney
Enbridge enters contest to build lines from Alberta, Bakken, to Texas refineries
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While its rival TransCanada waits anxiously for the Obama administration to decide the fate of the Keystone XL pipeline, Canada’s No. 2 pipeline company Enbridge is on the verge of offering shippers a “huge variety of delivery options,” said Chief Executive Officer Pat Daniel.
Topping the list, depending on results from a current round of industry discussions, is a possible 300,000 barrel per day pipeline link from Chicago to Houston, which could come on stream by late 2013 and reduce a growing bottleneck at the Cushing, Okla., trading hub.
The so-called Monarch pipeline carries the added advantage of not needing a presidential permit — the major stumbling block for XL — because it does not cross the Canada-United States border.
Daniel said that although a date has not yet been set for an open season, the Monarch proposal will “come to a head in a matter of months” because of the pressure to start moving crude from the Alberta oil sands and the Bakken play in North Dakota and Saskatchewan to U.S. Gulf Coast refineries.
He said many prospective customers are “coming close” to endorsing Monarch.
Saturation point fast approaching
Enbridge Chief Financial Officer Richard Bird said there is now so much light crude coming out of western North America that the saturation point is fast approaching in U.S. Midwest markets, where refineries are being converted to handle greater volumes of heavy crude. The Cushing bottleneck and high price differentials between West Texas Intermediate and North Sea Brent has climbed as high as US$25 per barrel and is costing Canadian producers as much as C$50 million a day because of their reliance on a single export market, prompting the clamor for an alternative route to Asia.
Monarch, although only one-third of the 1.1 million bpd capacity on the combined Keystone pipelines, would offer some shorter-term relief along with access to the PADD III region, which encompasses the Texas refining hub, where Canadian imports currently amount to less than 3 percent of the volumes.
But PADD III is a natural outlet for Canadian heavy crude, which compares favorably with the shrinking supplies of Mexican Maya and Venezuela Orinoco crudes, as well as Saudi medium.
Others in race to Gulf
The race to the Gulf Coast is not confined to the two Canadian companies. Enterprise Products Partners and Energy Transfer Partners are proposing a 450,000 bpd line from Cushing to Houston by 2012.
Enbridge is also exploring other options to deliver more light crude to Eastern Canada and the U.S.
They include greater access to Minnesota and the Chicago area to take advantage of increased heavy crude cracking capacity and the reversal of Enbridge’s existing 240,000 bpd Line 9 from Montreal to Sarnia, Ontario, which Daniel said “has very good prospectivity.”
Enbridge enters the competition armed with a new tolling agreement for the Canadian portion of its mainline and an international joint tariff for cross-border shipments, which Daniel said offers mainline shippers a stable and competitive long-term toll.
He is not concerned about the flurry of interest in the use of railroads to transport crude, including announcements by Oklahoma-based Musket to increase its rail capacity from North Dakota’s Bakken play to 70,000-80,000 bpd from 10,000-16,000 bpd and by Plains All American that it plans to double capacity at its crude-by-rail terminals in Illinois and Louisiana.
Daniel said rail offers “relatively low-cost, early entry into the transportation business, but long-term we can definitely beat rail in terms of tolls and reliability.”
“Even though these rail facilities might be put in place initially, they’re just a precursor of even more pipeline opportunities for use out of the Canadian and U.S. Bakken,” he said. Bakken production is forecast by the U.S. Energy Information Administration to exceed 1 million bpd within a few years, enough to almost displace current Saudi imports.
Mark.
The article refers to "Asian markets", that means China. The choice for the US is clear. Approve the pipeline and gain an extremely secure source of petroleum, or, turn it down and approve a secure source of petroleum for CHINA. Your choice Mr. Obama.
Yep, that’s what it boils down to, if you’re drillin’, someone’s buying. I would prefer that we buy oil from our neighbors in the Great White North, but the Canadians have to make a living too. You know how those crazy EPA and tree huggers are, they would rather let us be stuck in our houses freezing to death in the dark than let us produce energy.
If U.S. Says No To Canadian Oil Sands Pipeline, China Will Say Yes
http://www.forbes.com/sites/energysource/2011/06/30/if-u-s-says-no-to-canadian-oil-sands-pipeline-china-will-say-yes/There are also other pipelines available, such as the Trans Mountain pipeline that transports crude from the oil sands to Canada’s Pacific Coast. There, it can be loaded onto ships and taken to distant refineries. That pipeline is near capacity, but owner Kinder Morgan is considering an expansion. Another Canadian company, Enbridge, is proposing a new line from the sands to the northern British Columbia port of Kitimat.
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This is not idle talk. These projects have gone through initial vetting and are an economic alternative for them.
Well, yes. Seems like this is a national security issue to me. I’m surprised no one has brought that up.
Energy analysts on both sides of the border point to energy security as a main selling point. Some believe the Keystone XL pipeline could displace 40 percent of OPEC oil coming from the Persian Gulf. Canada is the biggest U.S. trading partner and a staunch ally.
Read more: http://www.foxnews.com/us/2011/08/17/energy-in-america-keystone-xls-oil-sands-pipeline-up-in-air/#ixzz1Vm4YYJ6u
August 17, 2011
Ok, so Obama hasn’t approved it because.....?
It doesn’t score points with his base.
Well, I’m glad to hear that he has the nation’s interests at heart.
TransCanada pipeline protesters arrested on White House sidewalk
http://fuelfix.com/blog/2011/08/22/transcanada-pipeline-protesters-arrested-on-white-house-sidewalk/
link ony due to Bloomberg content
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