Enbridge Inc has reached a positive final investment decision on the Mainline Optimization Phase 1 project (MLO1), earmarking $1.4 billion.
“MLO1 will add capacity to the company’s Mainline network and Flanagan South Pipeline (FSP) to meet customer demand for incremental egress, increasing deliveries of Canadian heavy oil to key refining markets in the U.S. Midwest (PADD II) and Gulf Coast (PADD III)”, Calgary, Canada-based Enbridge said in an online statement.
The project aims to add 150,000 barrels per day (bpd) of capacity to Mainline and up to 100,000 bpd to FSP.
“MLO1 will increase capacity on the Mainline through a combination of upstream optimizations and terminal enhancements”, Enbridge said. “In addition, Enbridge plans to add pump stations and terminal enhancements for FSP to increase capacity and will utilize existing capacity on Seaway Pipeline”.
The Seaway Pipeline is a 50-50 venture between Enbridge and Enterprise Products Partners LP.
“The FSP expansion is underpinned by long-term take-or-pay contracts for full-path service from Edmonton, Alberta to Houston, Texas, which support attractive returns for MLO1”, Enbridge said. “As part of the open season process on FSP earlier this year, the majority of existing customers elected to extend their existing full-path contracts through the next decade”.
The announcement did not say when Enbridge expects to complete the project.
In Enbridge’s quarterly report November 7, chief executive Greg Ebel said Enbridge was “advancing” phase 2 to add a further 250,000 bpd of incremental full-path capacity to Mainline “before the end of the decade”.
Currently the Mainline pipeline, stretching over 13,800 kilometers (more than 8,500 miles), carries up to about three million bpd of light, medium and heavy crude from the Canadian province of Alberta to Eastern Canada and the U.S. Midwest, according to Enbridge. It started service seven decades ago.
Earlier this year Enbridge announced a Mainline investment of up to CAD 2 billion ($1.43 billion) until 2028. That will be spent on “further enhancing and sustaining reliability and efficiency aimed at ensuring the Mainline system continues to operate safely and at full capacity to support maximum throughput for years to come”, Enbridge said in a press release March 4.
To contact the author, email jov.onsat@rigzone.com
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