Reuters reported that Enbridge Inc has expanded plans to ship oil to the US Gulf Coast from the glutted Cushing storage hub to include new capacity from the US Midwest.
Enbridge, while reporting a higher than expected second quarter profit, said that its Monarch pipeline proposal now comprises a northern and a southern leg as Canada's No 2 pipeline company tries to win support in a race that now includes at least three other proposed projects.
The new northern part of the Enbridge plan would move 200,000 to 300,000 barrels a day to Cushing from Flanagan. That would be in addition to Enbridge's previously announced 350,000 barrels per day Cushing Texas link.
Mr Pat Daniel CEO of Enbridge said that it made the addition after finding customers wanted to ship crude from Western Canada and the Bakken regions of Saskatchewan and North Dakota right through to refineries on the Gulf of Mexico, in similar fashion to rival TransCanada Corporation's proposed USD 7 billion Keystone XL pipeline.
Mr Daniel said that "We're currently out discussing that with potential shippers. We've been very encouraged with the initial discussion we're having on the prospects of being able to move crude all the way through."
Companies have sought to bolster their options for moving crude from Cushing, where oversupply has contributed to a sharp discount on the price of land locked North American oil versus seaborne crude.
Other players vying to add capacity to the Gulf from Cushing include a joint venture of Enterprise Product Partners EPD.N and Energy Transfer Partners LP, as well as Magellan Midstream Partners LP. The northern portion of the new Enbridge line would likely include a combination of new construction and existing facilities.
Mr Daniel said that unlike Keystone XL, which has been delayed as the US State Department weighs the proposal against a backdrop of opposition from environmentalists and some politicians, Monarch would not require a US presidential permit because it would not cross any international border.
(Sourced from www.reuters.com)
