[IPSM] Enbridge plans pipeline to U.S. east coast

[Macdonald Stainsby]

Enbridge plans pipeline to U.S. east coast

Part of effort to prevent oil sands output from flooding any single market

DAVID EBNER

CALGARY -- Enbridge Inc. wants to move Canadian oil sands output all the 
way to the Philadelphia region, and is working on early plans for a 
$1.4-billion (U.S.) pipeline that would carry domestic crude to the east 
coast of the United States for the first time.

The plan is part of a larger effort by Enbridge to build a network of 
new oil pipeline connections in the United States so that expected 
increases in oil sands production do not flood any single market.

The pipeline to Philadelphia or nearby New Jersey is to be quietly 
unveiled at an oil sands conference today in Calgary in a presentation 
by Enbridge titled, "Access to markets -- progress and plans."

The connection could be in service as early as 2010, the presentation 
states, with the pipeline carrying 300,000 barrels a day. The link would 
begin in the Chicago region, which is now the main destination for 
Canadian oil.

Enbridge considers the project a "potential initiative," describing it 
as "very preliminary," according to company spokesman Glenn Herchak.

"Because of the increasing growth of the oil sands, we've seen some 
market interest [from oil producers] in the potential for new pipeline 
capacity into the [eastern U.S.] region," Mr. Herchak said.

The company has also had initial discussions with refiners to handle the 
oil, but Mr. Herchak wouldn't identify them.

One potential customer would be Sunoco Inc., which owns the largest 
refinery in the region, a facility in Philadelphia that can process 
330,000 barrels a day.

ConocoPhillips Co. has a 230,000-barrel-a-day refinery in New Jersey 
near New York and a 185,000-barrel-a-day operation near Philadelphia.

The Philadelphia connection is one of two big new pipeline concepts 
Enbridge is pursuing. Last July, it said it was looking at a 
$3.6-billion, 400,000-barrel-a-day line to connect Alberta with Texas. 
The idea remains in the early stages, Mr. Herchak said.

The new ideas to move Canadian oil to different areas of the United 
States follow the stall that hit the proposed $4-billion (Canadian) 
Gateway pipeline, which would move oil sands crude from Edmonton to the 
west coast of British Columbia for export to Asia. After significant 
opposition from aboriginal groups along the route, as well as slow talks 
between refiners in China and Canadian producers, Enbridge was unable to 
get long-term shipping contracts signed.

The company has pushed back its in-service goal for Gateway to the 
2012-2014 time frame from 2010.

To support what Enbridge is calling "a period of unprecedented organic 
growth," the company yesterday announced a deal with underwriters to 
sell $523.1-million of new equity, pricing 13.5 million shares at $38.75.

The offering was announced after the market closed yesterday, with 
Enbridge shares ending the day at $39.14 on the Toronto Stock Exchange, 
near an all-time high of $41.48 reached in December.

Enbridge, led by chief executive officer Patrick Daniel, said it wants 
to finance its projects "in a prudent manner," adding that selling 
assets to income trusts to raise funds "is [not] realistic in the near 
term due to market uncertainty."

Among Enbridge's list of plans are a $1.8-billion (U.S.) line called 
Alberta Clipper to add oil export capacity from Alberta to Wisconsin, 
and a $1.3-billion project called Southern Lights to carry a very light 
oil called diluent to Alberta from Chicago. Southern Lights is under 
construction. Diluent is mixed with raw bitumen from the oil sands so it 
can move through a pipeline to a refinery for processing.

Enbridge yesterday also said its board of directors has decided to 
increase the quarterly dividend by 7 per cent, making the annual rate 
$1.23 (Canadian), up from $1.15.


-- 
Macdonald Stainsby
http://independentmedia.ca/survivingcanada
http://lists.econ.utah.edu/mailman/listinfo/rad-green
In the contradiction lies the hope
    --Bertholt Brecht.