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Latest Headlines
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Jul 9, 2008 4:53:00 PM MST
Enbridge delays plans for major pipeline to ship crude to the U.S. Gulf Coast (Enbridge)
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CALGARY _ Enbridge (TSX:ENB) is delaying plans for a major pipeline that would ship Canadian crude to the U.S. Gulf Coast by about two years, opting instead to move it by tanker because of a poorer outlook for oilsands production from northern Alberta.
The major oil transporter said Wednesday it was still working on the Texas Access pipeline with Exxon Mobil Corp. (NYSE:XOM), which will ship crude from Canada to the U.S. Gulf Coast.
But it said that pipeline may now be completed closer to 2013 or 2014, instead of 2011 as originally planned.
"Supply out of Western Canada is ramping up at a little bit slower rate than was anticipated by the industry, so in that circumstance we tried to design something that would address what the real key needs were in a quick manner," vice-president Al Monaco said in an interview.
"The best market possible for Canadian heavy crude at the moment is the U.S. Gulf Coast (where much of that country´s refineries are located). What this project really does is provide a nifty interim solution to get volumes to the Gulf without waiting for a large diameter pipeline proposal that would take much more volume than is currently envisioned to be generated in the near term."
Enbridge plans to move about 200,000 barrels of oil per day to the U.S. Gulf by mid-2010 through the $350-million tanker project, titled Trailbreaker, at a shipping cost of $8 per barrel of oil.
"When the volumes of Canadian heavy crude seeking access to the U.S. Gulf Coast exceed the capacity of Trailbreaker, we´ll be ready to meet that requirement with our Texas Access joint venture at a lower toll," Monaco said earlier Wednesday at an oilsands conference in Calgary.
"The Trailbreaker system will then be redeployed to provide access to East Coast markets for synthetic barrels."
The $2.6 billion Texas Access pipeline is expected to have a capacity of 400,000 barrels a day. It will connect from Enbridge´s mainline at Patoka, Ill., and stretch all the way down to the Houston area.
Enbridge is Canada´s largest oil shipper and owner of the country´s largest natural gas utility, the former Consumers Gas in Ontario.
The company´s shares closed at $41.28 on the TSX, down 52 cents.
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