* Sees pipelines constrained by 2017
* Says Northern Gateway may provide some relief
* Sees 250,000 bpd of Seaway capacity by yearend
By Julie Gordon
TORONTO, June 18 Enbridge Inc, Canada's
No. 2 pipeline company, said on Monday faster than expected
growth in North American oil output means its lines could be at
full capacity as soon as 2016 despite a C$3.2 billion ($3.1
billion) expansion of its system.
Enbridge, whose lines carry the bulk of Canada's oil exports
to the United States, is struggling to cope with booming oil
output from the Alberta oil sands and from shale-oil fields such
as Bakken in North Dakota.
The company expects to complete a huge expansion of its
North American pipeline network in 2014, bulking up its massive
mainline, which currently ships close to 2 million barrels of
crude per day, and tapping new refining markets in Quebec. The
planned mainline expansion will add more than half-a-million
barrels a day of new capacity within two years.
Enbridge President Al Monaco said the company and partner
Enterprise Products Partners LP could add another
250,000 bpd of capacity on the 150,000 bpd Seaway pipeline,
which runs from Cushing, Oklahoma, to the U.S. Gulf Coast by
yearend, earlier than its previous target for the first quarter
Tight pipeline capacity lowers prices for producers and the
expansion could help narrow the difference between Canadian and
U.S. oil prices. But any relief for oil producers from the 2014
expansion could be short-lived as forecasts call for production
from Canada alone to rise by more than half by the end of the
That could choke the system once more if lines such as
Enbridge's planned 525,000 bpd Northern Gateway pipeline to the
Pacific Coast are not completed.
"I think we will be capacity-constrained going forward,
probably in the range of 2016 and 2017," Monaco told reporters
on Monday following a speech in Toronto. "There's a number of
opportunities out there to further expand capacity, I think one
of them, frankly, that is a great opportunity is Gateway ... And
the advantage of Gateway, of course, is that it accesses a very
The C$5.5 billion Gateway project would offer Canadian
producers their first significant access to booming Asian
markets and steer oil away from the glutted U.S. Midwest if
completed on schedule in 2017.
The project is supported by oil producers and the Canadian
government, but it is bitterly opposed by environmentalists and
by many British Columbia aboriginal groups concerned about
potential oil spills. Even if the line is approved by
regulators, court challenges could further delay construction.
Enbridge shares fell 24 Canadian cents to C$39.14 on the
Toronto Stock Exchange on Monday.