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While all of the focus is on the controversial TransCanada Keystone XL pipeline that still requires approval from the US Government, another pipeline company is actively working to alleviate the oil price differentials that have impacted North American producers.
Enbridge (NYSE:ENB) is spending $15 billion to add pipelines that will move up to 1 million barrels a day of oil from Canada and North Dakota.
That is more than the 830,000 barrels that the proposed Keystone XL is going to be able to transport.
Enbridge’s initiatives include:
1) Gulf Coast Access, a $6.4 billion initiative that is already in partial operation. It involves an expansion of the Enbridge Mainline System to the Chicago area, then the construction of the Flanagan South line connecting that oil with the hub in Cushing, Oklahoma. This is expected to be in place by 2014.
2) The $6.2 billion Light Oil Market Access project, which involves the 375,000 bpd Sandpiper line bringing oil from North Dakota and southern Saskatchewan down to the Chicago area, where several other expansions and additional links will tie-in lines and allow oil to flow south or east.
3) The $2.7 billion Eastern Access project, will include line upgrades to the current line to Sarnia Ontario which by 2014 should have 300,000 bpd moving east from Sarnia through a reversed Line 9 to refineries in the Toronto area and Montreal. This will allow for the elimination of oil that is currently being imported to Eastern Canada from Africa and other locations.
It is a slow process, but the market is working to get this North American unconventional oil to the right places.
