Enbridge Inc. ENB and Energy Transfer announced
today that they have entered into an agreement on the terms for the
joint development of a project to provide crude oil pipeline access
to the eastern Gulf Coast refinery market from the Patoka, Illinois
hub.
The project will involve the conversion from natural gas service to
crude oil service of certain segments of pipeline that are currently
in operation as part of the natural gas system of Trunkline Gas
Company, LLC, a subsidiary of Energy Transfer Partners, L.P. and
Energy Transfer Equity, L.P. This agreement is subject to approval by
the Federal Energy Regulatory Commission (FERC) of Trunkline's July
2012 request to abandon certain designated segments of pipeline from
natural gas transmission service. The converted 30-inch diameter crude oil pipeline is expected to be in service by 2015. It will have
capacity of up to 420,000 to 660,000 barrels per day (bpd) depending
on crude slate and the level of subscriptions received in an open
season to be conducted in the near future.
Enbridge and Energy Transfer ETP would each own 50%
of the joint venture entity. Enbridge's participation in the venture
is subject to a minimum level of commitments being obtained in the
open season, and on completion of due diligence.
Crude oil can reach the Patoka hub from both western Canada
production and from the Bakken play in North Dakota through a variety
of existing pipelines as well as through Enbridge's Southern Access
Extension pipeline, which is already under development. The eastern
Gulf Coast market is a highly attractive market for Canadian and
Bakken crude, but is not currently accessible by pipeline. The
Trunkline conversion would create the first pipeline transportation
option for transportation of crude oil to the eastern Gulf Coast from the midwest U.S.
Once completed, the project will span more than 700 miles, including
a new lateral from central Louisiana, near the town of Boyce, to the
refining market and the crude oil hub at St. James, Louisiana. The
St. James hub will provide access to refineries in the eastern Gulf
Coast, as well as dock access for water-borne shipments.
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