Enbridge Inc, the largest transporter of Canadian crude to the US, began a series of pipeline projects in the second quarter, part of a CAD 8 billion plan to boost shipments of Canadian and Bakken oil to new markets.
Enbridge has enough commercial support to proceed with plans to expand its Toledo pipeline in the US and re reverse Line 9 in Canada. It also expects to go forward with plans to expand lines that connect the US with Alberta and Ontario, helping to ship more oil sands output and unclog bottlenecks caused by rising North American crude output.
Mr Pat Daniel chairman & CEO of Enbridge Inc said that "Our eastern access projects complement our previously announced Gulf Coast access projects in expanding access to new markets in North America for growing production from western Canada and the Bakken."
Enbridge owns and operates Canada's largest oil pipeline network spanning 24,738 kilometers that ship 2.3 million barrels of crude and liquids a day. Increasing production in Canada and the Bakken formation in North Dakota and Wyoming require more pipeline investment and Daniel expects a 10% increase in adjusted earnings per share through the middle of this decade and beyond.
The expansion plans come after a series of spills from Enbridge pipelines. The most recent spill was of 1,200 barrels near Grand Marsh, Wisconsin, on July 27th 2012. Enbridge faces a record USD 3.7 million fine from the US Pipeline and Hazardous Materials Safety Administration for a 2010 rupture that spilled more than 20,000 barrels of oil into a tributary of the Kalamazoo River in Michigan.
Enbridge said on July 20th 2012 that it will spend as much as CAD 500 million more to use thicker steel and increase monitoring on its proposed Northern Gateway pipeline, in response to criticism about the risks of an oil spill. The 1,177 kilometer, CAD 5.5 billion conduit would traverse the Rocky Mountains and end on the Pacific Coast of British Columbia, allowing for oil sands exports.
Mr Al Monaco president of Enbridge said that "The trend is declining in terms of our leaks. We are at about half of the rate of industry in terms of that benchmark."
Source - Bloomberg
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