Enbridge to Invest $6.2 Billion in Light Oil Market Access Program

Thu Dec 6, 2012 4:19pm EST

* Reuters is not responsible for the content in this press release.

Enbridge Inc. (TSX:ENB) (NYSE:ENB), announced today that it has received
shipper support to proceed with a $6.2 billion program to expand access
to markets for growing volumes of North Dakota and western Canada light
oil production. The Light Oil Market Access Program (the Program) will
provide increased pipeline capacity on Enbridge's North Dakota regional
system; further expand capacity on the U.S. mainline system; enhance
Canadian mainline terminal capability; upsize the Eastern Access Program
and provide additional access to U.S. Midwestern refineries. The Program
will provide access from the Enbridge system to attractive refinery
markets in Ontario, Quebec and the U.S. Midwest for an additional 400,000
barrels per day (bpd) of light oil.

    The Program includes a number of individual projects that will be
undertaken by Enbridge subsidiaries or affiliates including Enbridge
Energy Partners, L.P. ("Enbridge Partners" or "the Partnership")
(NYSE:EEP). Funding of the Program will be shared between Enbridge and
the Partnership through arrangements intended to enable Enbridge Partners
to benefit from a significant investment opportunity within the limits of
its funding capability. The Partnership's investment in the $6.2 billion
Program is expected to be approximately $3.4 billion. 

    "This $6.2 billion investment rounds out our suite of major crude oil new
market access initiatives for North American markets," said Al Monaco,
President and Chief Executive Officer, Enbridge Inc. "It follows on the
heels of our $2.7 billion Eastern Access Program announced in May, and
our $5.8 billion upsized U.S. Gulf Coast Access Program announced in
March, including a number of projects adding capacity to the existing
mainline system announced in May. These market access initiatives reflect
changing North American supply and demand fundamentals and will create
significant value for our customers. This latest investment meets the
same stringent criteria applicable to all Enbridge growth projects." 

    The Light Oil Market Access Program responds to significant recent
developments with respect to supply of light oil from U.S. north central
formations and western Canada, as well as refinery demand in the U.S.
Midwest and eastern Canada. On the supply side, production from the
Bakken formation centered in North Dakota has grown from 200,000 bpd to
700,000 bpd in the last five years with potential to expand to 1,200,000
bpd or more in the next five years, if transportation access to refinery
markets is available. Additional growth in light crude production of
100,000 bpd or more is also anticipated from the application of the
latest recovery technologies to the Cardium and Viking formations in
Alberta, Canada. Supply from these areas has become increasingly
attractive to refineries in the U.S. Midwest and eastern Canada compared
to much more costly alternative sources. 

    The individual projects within the Program are targeted to be available
for service at varying dates from 2014 to early 2016. Shippers have
provided support for each of the individual projects either in the form
of capacity commitments or support for the regulatory approval and
commercial framework of the North Dakota and Mainline system projects,
including support for the regulatory approval of the North Dakota
expansion commercial terms pending before the Federal Energy Regulatory
Committee (FERC). The terms approved by shippers for the U.S. mainline
system expansion projects include surcharges to be added to Enbridge's
Competitive Tolling Settlement (CTS) international joint toll. The
Program will require various regulatory approvals and permits.

    "We stand now with a total of $26 billion of commercially secured
attractive growth investments, which are planned to be in service between
2012 and 2016, providing us with confidence that we will achieve an
average annual growth rate in earnings per share exceeding 10% through
that year," said Mr. Monaco. "With a commercial model for much of this
capital, which provides increasing returns over time, we are also on
track to extend our industry-leading growth rate beyond 2016.

    "Effective execution of this growth program is a critical priority and we
are well positioned with the required human and financial resources. Our
Major Projects department remains on schedule and on budget for
substantially all projects currently under development. On an
enterprise-wide basis, we have raised more than $6 billion of capital
markets funding to date in 2012, and have expanded our general purpose
bank credit facilities to more than $12 billion."

    Enbridge is well underway in stakeholder consultations for some of these
projects and will soon begin consulting with landowners and other
stakeholders on other projects in earlier stages of planning. "Our
highest priority remains the safe, reliable and environmentally
responsible construction and operation of our energy infrastructure
assets, and our team remains focused on implementing our Operational Risk
Management Plan and demonstrating an industry-leading standard of
operating performance," said Mr. Monaco.

                                            Light Oil Market Access Projects
                                        Estimated     In Service            
Project                                      Cost         Target     Funding
North Dakota System Expansion and                                           
  Sandpiper Project                        US$2.5     early 2016         EEP
Southern Access Extension                  US$0.8     early 2015         ENB
Eastern Access Upsize                                                       
  Line 9 Capacity Expansion                 C$0.1       mid-2014         ENB
  Line 6B capacity expansion               US$0.4     early 2016       Joint
                                          billion                  (ENB/EEP)
U.S. Mainline System Capacity                                               
  Chicago Area Connectivity (Line 62       US$0.5       mid-2015       Joint
   Twin Flanagan to Griffith)             billion                  (ENB/EEP)
  Superior to Flanagan (Line 61            US$1.3     mid-2015 /       Joint
   capacity expansion)                    billion     early 2016   (ENB/EEP)
Canadian Mainline System                                                    
  Terminal Flexibility and                  C$0.6           mid-         ENB
   Connectivity                           billion     2015/early            

    Conference Call

    Enbridge Inc. will host a webcast conference call to discuss its 2013
Guidance as well as the Light Oil Market Access Program as follows:

    Webcast Information

    Event: Enbridge Inc. 2013 Guidance Conference Call

    Date: Thursday, December 6, 2012 

    Time: 2:30 p.m. Mountain Time / 4:30 p.m. Eastern Time 

    Webcast Registration: sign-up

    Conference Call Information

    Dial-in #'s (Audio only - please dial in 10 minutes ahead if not

    North America: 1-888-713-4213 

    Outside North America: +617-213-4865

    Participant Passcode: 33022607

    Pre-Registration for Conference Call

    For participants wishing to pre-register for the conference call, please
click on this link. 

    Pre-registration is not mandatory, but is recommended as it provides
immediate entry into the call and facilitates the timely start of the
conference. Once pre-registration is completed you will receive online
confirmation with a passcode and PIN. This information should be noted or
copied into your calendar as you will be prompted for this information
when dialing in on the day of the event.

    About Enbridge Inc.

    Enbridge Inc. is a North American leader in delivering energy and one of
the Global 100 Most Sustainable Corporations. As a transporter of energy,
Enbridge operates, in Canada and the U.S., the world's longest crude oil
and liquids transportation system. The Company also has a significant and
growing involvement in natural gas gathering, transmission and midstream
businesses, and an increasing involvement in power transmission. As a
distributor of energy, Enbridge owns and operates Canada's largest
natural gas distribution company, and provides distribution services in
Ontario, Quebec, New Brunswick and New York State. As a generator of
energy, Enbridge has interests in close to 1,000 megawatts of renewable
and alternative energy generating capacity and is expanding its interests
in wind and solar energy, geothermal and hybrid fuel cells. Enbridge
employs more than 10,000 people, primarily in Canada and the U.S. and is
ranked as one of Canada's Greenest Employers and one of Canada's Top 100
Employers for 2013. Enbridge is included on the 2012/2013 Dow Jones
Sustainability World Index and the Dow Jones Sustainability North America
Index and is also a constituent of the 2012/2013 FTSE4Good Index Series.
Enbridge's common shares trade on the Toronto and New York stock
exchanges under the symbol ENB. For more information, visit

    About Enbridge Energy Partners, L.P.

    Enbridge Energy Partners, L.P. (www.enbridgepartners.com) owns and
operates a diversified portfolio of crude oil and natural gas
transportation systems in the United States. Its principal crude oil
system is the largest transporter of growing oil production from western
Canada. The system's deliveries to refining centers and connected
carriers in the United States account for approximately 15 percent of
total U.S. oil imports; while deliveries to Ontario, Canada satisfy
approximately 70 percent of refinery demand in that region. The
Partnership's natural gas gathering, treating, processing and
transmission assets, which are principally located onshore in the active
U.S. Mid-Continent and Gulf Coast area, deliver approximately 2.5 billion
cubic feet of natural gas daily. Enbridge Energy Partners is ranked as
one of the 100 Most Trustworthy Companies in America.

    Enbridge Energy Management, L.L.C. (www.enbridgemanagement.com) manages
the business and affairs of the Partnership and its sole asset is an
approximate 13 percent interest in the Partnership. Enbridge Energy
Company, Inc., an indirect wholly owned subsidiary of Enbridge Inc. of
Calgary, Alberta, (NYSE:ENB) (TSX:ENB) (www.enbridge.com) is the general
partner and holds an approximate 22 percent interest in the Partnership.

    Certain information provided in this news release constitutes
forward-looking statements. The words "anticipate", "expect", "project",
"estimate", "forecast" and similar expressions are intended to identify
such forward-looking statements. Although Enbridge and its affiliate EEP
believe that these statements are based on information and assumptions
which are current, reasonable and complete, these statements are
necessarily subject to a variety of risks and uncertainties pertaining to
operating performance, regulatory parameters, weather, economic
conditions and commodity prices. You can find a discussion of those risks
and uncertainties in the Canadian securities filings for ENB, and
American SEC filings for ENB and EEP. While Enbridge and EEP make these
forward-looking statements in good faith, should one or more of these
risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary significantly from those
expected. Except as may be required by applicable securities laws,
Enbridge and EEP assume no obligation to publicly update or revise any
forward-looking statements made herein or otherwise, whether as a result
of new information, future events or otherwise.

    Enbridge Light Oil Market Access Program

    Background Information

    Enbridge's Light Oil Market Access Program (the Program) will provide
increased pipeline capacity on Enbridge's North Dakota regional system;
further expand capacity on the U.S. mainline system between Superior,
Wisconsin and the Chicago area; add capacity to the Eastern Access
Program; enhance Canadian mainline terminal capability and provide
additional access to U.S. Midwestern refineries. Together, these projects
will provide access to attractive markets in Ontario, Quebec and the U.S.
Midwest for an additional 400,000 barrels per day (bpd) of light oil. 

    North Dakota System Expansion/Extension (Sandpiper Project)

    The Bakken takeaway capacity of the Partnership's North Dakota System
will be expanded by 225,000 bpd to a total of 580,000 bpd, with a target
in service date of early 2016. The expansion will involve construction of
an approximately 965-kilometre (600-mile) 24-inch diameter line from
Beaver Lodge, North Dakota to the Superior, Wisconsin Terminal. The new
line will twin the 210,000 bpd existing North Dakota System mainline,
which now terminates at Clearbrook Terminal in Minnesota, adding 225,000
bpd of capacity on the twin line between Beaver Lodge and Clearbrook and
375,000 bpd capacity between clearbrook and Superior.

    The estimated capital cost of this project is approximately $2.5 billion.
The capital cost will be rolled into the existing North Dakota System
rate base, with the associated cost of service to be recovered in tolls.
The Sandpiper Project's commercial terms remain subject to approval by
FERC as filed in the Petition for Declaratory Order filed with FERC on
November 2, 2012. The commercial terms filed with FERC have support from
numerous shippers and stakeholders on the North Dakota System. EEP will
fully fund the Sandpiper Project.

    Eastern Access Upsize

    On May 16, 2012, Enbridge announced that it had secured sufficient
commercial support to proceed with additional aspects of its $2.7 billion
Eastern Access Program, including full reversal of its Line 9 to provide
crude oil supply from the Bakken and western Canada to refineries in both
Ontario and Quebec. An open season process was subsequently held and
additional commitments were received that will require an additional
80,000 bpd of delivery capacity within Ontario and Quebec at a cost of
approximately $0.1 billion. This will bring the total investment within
Ontario and Quebec to $0.5 billion including the reversal.

    The Eastern Access Program also includes supporting U.S. mainline system
expansions between Griffith, Indiana, and the border near Sarnia,
Ontario, which will require upsizing at an estimated cost of
approximately $0.4 billion. This brings the estimated total cost of the
Eastern Access supporting mainline expansions to $2.6 billion. The
upsized capacity and cost is supported by the Canadian Association of
Petroleum Producers (CAPP), representing Enbridge's mainline shippers,
for inclusion in the U.S. mainline system cost of service surcharge
mechanism. The additional cost will be included in the Eastern Access
Joint Funding Arrangement pursuant to which Enbridge will fund 60% of the
cost and EEP will fund 40%, with an option to pare down by up to 15% and
to claw back up to 15%.

    The upsized Line 9 reversal and supporting U.S. mainline expansion
capital brings the total Eastern Access Program estimated cost to $3.2
billion including the $0.2 billion Toledo Pipeline expansion. 

    Southern Access Extension Pipeline

    Enbridge will construct the 265-kilometre (165-mile), 24-inch diameter
Southern Access Extension Pipeline from Flanagan to Patoka, Illinois at
an estimated cost of approximately $0.8 billion, and a target in service
date of first quarter 2015. The initial capacity of the line will be
300,000 bpd. Marathon Petroleum Company L.P. (Marathon Petroleum) has
contracted capacity on the pipeline in order to access light crude oil
supply off the Enbridge mainline for its PADD II refineries.

    The terms of the Marathon Petroleum contract provide sufficient
commercial support to the project, but an open season will be held to
provide other potential shippers with an opportunity to secure capacity.
The capacity of the pipeline could be increased through additional
horsepower, and/or upsized to 30inch diameter if substantial further
commitments were received. Marathon Petroleum will have an option to take
up to a 25% interest in the pipeline.

    U.S. Mainline System

    Based on increased availability of western light oil supplies, and
attractive pricing relative to U.S. Gulf Coast sourced supply, Chicago
area refineries are shifting to western Canada and North Dakota as their
primary light oil supply source. To accommodate this additional demand,
as well as the additional Ontario and Quebec demand, the capacity of the
Lakehead System between Flanagan, Illinois and Griffith, Indiana will be
expanded by constructing a 122-kilometre (76-mile), up to 36-inch
diameter twin of the existing Line 62. The new line will have initial
capacity of 570,000 bpd at an estimated cost of approximately $0.5
billion, and a target in service date of mid-2015. The capacity of the
42-inch diameter Line 61 from Superior to Flanagan will also be expanded
to its full 1,200,000 bpd potential, together with related terminal
modifications, at an estimated additional cost of approximately $1.3
billion, with a target in service date of mid-2015.

    These projects will be jointly funded by Enbridge and the Partnership,
under the terms of a Mainline Expansion Joint Funding Arrangement,
paralleling the Eastern Access Joint Funding Arrangement.

    CAPP has approved inclusion of this additional mainline expansion capital
in the Lakehead System local toll cost-of-service surcharge mechanism.

    Canadian Mainline System Terminal Flexibility and Connectivity

    In order to accommodate additional light oil volumes and enhance the
operational flexibility of the Canadian mainline terminals, an upsized
expansion program will be undertaken at an estimated cost of
approximately $0.6 billion., The Representative Shipper Group (RSG),
established under the terms of the mainline CTS, has approved surcharges
on the international joint toll provided for in the CTS which are
applicable to all mainline shipments which originate from western Canada
and are delivered to points east of Superior, Wisconsin. A surcharge of
$0.05 will apply to all such shipments delivered to Flanagan and a
surcharge of $0.12 to all other such shipments. 

Enbridge Inc.
Graham White
(403) 508-6563 or Toll Free: (888) 992-0997

Enbridge Inc.
Jody Balko
Investment Community

Enbridge Energy Partners, LP.
Larry Springer
(877) 496-8142

Enbridge Energy Partners, LP.
Sanjay Lad
Investment Community
Toll-free: (866) EEP INFO or (866) 337-4636

Copyright 2012, Market Wire, All rights reserved.

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