Enbridge speeds up expansion, adding dock space, storage plans

Gary Park

for Petroleum News

Less than a year after striking a deal to expand its rail network investment in North Amerca by U$9 billion, North America's largest crude and gas shipping company has tossed another C$500 million into the pot by bolstering its continental transportation system.

In targeting aggressive plans to offer increased volumes on its oil pipeline network by 200,000 barrels per day over the next five years, Enbridge said it expects to offer capacity to handle climbing production from the Western Canada Sedimentary Basin.

"As has happened in the past, as soon as people think there is too much pipeline capacity, there's more production coming on stream," Enridge CEO Greg Ebel told reporters.

"There probably won't be a major pipeline build, but at this point in time, with the shipments we are talking about, we can add more volumes," he said.

The investment includes the expansion of Enbridge's Ingleside Energy Center near Corpus Christi, Texas, to add 2.5 million bpd of storage and buy two marine docks and land next to the facility from Flint Resources.

Ebel said access to dock space will allow his company to load more very large crude carriers to meet growing customer demand.

The Ingleside Facility is "bang in the middle of what we want to do" in terms of expansion to meet growing global demand for North American crude and gas, Ebel said.

Producers in Western Canada have been cranking up production volumes over the past year as global demand reaches record levels.

Canadian oil sands producer Cenovus Energy has reflected that surge by laying out plans to boost its output to 950,000 bpd of oil equivalent by 2028, up about 150,00 boe per day or 9.6% from a year earlier.

To keep its wheels in running order, Enbridge is also joining forces with 1 Squared Capital and pipeline firms Whitewater and MPLX to connect natural gas supplies from the Permian Basin to the U.S. Gulf Coast. The new joint venture underscores Enbridge's focus on U.S. markets particularly as Canadian LNG projects face delays while global appetite for the fuel continues to grow.

Enbridge will have a 19% stake in the new venture, while 1 Squared and Whitewater will hold a combined 50.6% stake and MPLX will hold 30.4%.

--GARY PARK