UPDATE 1-Enbridge, partner to convert gas pipeline to ease crude glut
* To move crude from Illinois to the eastern Gulf Coast
* Pipeline to have capacity of 420,000-660,000 barrels/day
Feb 15 (Reuters) - Energy Transfer Partners LP plans to convert parts of a gas pipeline to carry crude oil under a joint venture with Enbridge Inc, helping move soaring supplies from Canada and North Dakota to refineries in the eastern Gulf Coast.
The pipeline, expected to be in service by 2015, will be the first to transport crude oil from the U.S. Midwest to the eastern Gulf Coast, the companies said in a statement on Friday.
A unit of Energy Transfer currently owns the gas pipeline, which will be able to carry between 420,000 and 660,000 barrels of oil per day from the storage and blending hub of Patoka, Illinois. Patoka is connected to western Canada and North Dakota's Bakken shale field through a network of existing oil pipelines.
Production from shale formations in North America has surged, creating a scramble to build infrastructure to get supplies to refining hubs, especially the U.S. Gulf Coast, which holds roughly half of U.S. refining capacity.
Tighter pipeline capacity in Canada and growing production means that Western Canada Select heavy grade trades at a discount to the U.S. Western Texas Intermediate benchmark .
"Over the last two years, we have committed $15 billion of new investments that will open new markets and help to address the significant price disparities facing western Canadian and Bakken producers, and to meet the demand of North American refiners," Enbridge Chief Executive Al Monaco said.
Enbridge, Canada's second-largest pipeline company, reported an 8 percent fall in quarterly profit as it was hurt by an after-tax charge of C$105 million related to certain offshore assets.
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