* Sees 250,000 bpd of Seaway Pipeline capacity by yearend
* Sees pipelines constrained by 2017
* Says Northern Gateway may provide some relief
By Julie Gordon
TORONTO, June 18 Enbridge Inc, Canada's
No. 2 pipeline company, expects to complete an expansion of its
newly reversed oil pipeline to Texas refineries by the end of
this year, the company's incoming chief executive said on
That would be sooner than previous forecasts used by the
company and its U.S. partner.
Enbridge and Enterprise Products Partners LP have
been saying for months that they would boost the capacity of the
Seaway pipeline from the Cushing, Oklahoma, storage hub to
400,000 barrels a day from 150,000 sometime in the first quarter
of next year.
It is one of a number of pipeline projects aimed at curing a
bottleneck at the massive pipeline hub, which is expected to
reduce deep price discounts for oil that travels there from
rapidly expanding U.S. and Canadian oil fields.
"We expect to bring another 250,000 barrels a day of
capacity by the end of this year. But at some point, when we
twin that Seaway line, we'll start to see a relaxing of this
basis differential between Cushing and the Gulf Coast," Enbridge
President Al Monaco told reporters following a speech in
Monaco is slated to become CEO of the company, which moves
the bulk of Canadian oil exports to the United States, later
Faster-than-expected growth in North American oil output
means his company's other pipelines could be at full capacity as
soon as 2016 despite a recently announced C$3.2 billion ($3.1
billion) expansion of its system, he said.
The company expects to complete the expansion of its North
American pipeline network in 2014, bulking up its 2 million bpd
mainline, 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.
However, 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 said. "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 large market."
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.