By Quintin Soloviev - Own work, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=176176412default
Calgary — Enbridge has approved a 1.4 billion dollar expansion of its Mainline and Flanagan South pipelines to move more Canadian heavy crude into the United States Midwest and down to the Gulf Coast.
The project, known as Mainline Optimization Phase 1, is expected to add 150,000 barrels per day on the Mainline and 100,000 barrels per day on Flanagan South by 2027. Enbridge says the work will involve pump and terminal expansions on Flanagan South and upstream optimizations on the Mainline, supported by long term shipping commitments from Edmonton to Houston.
The expansion comes as oil sands production climbs toward record levels. Output is projected to approach 3.9 million barrels per day by 2030, driven by low decline and high efficiency projects. Analysts say additional pipeline space lowers the risk of price shocks when capacity tightens and improves access to high value United States markets.
Enbridge says its Mainline system is already running near its ceiling, averaging 3.1 million barrels per day in the third quarter. The company is also studying a proposed 200,000 barrel per day connector in southern Illinois to move more crude toward the Gulf Coast.
Regulators in the United States recently removed one hurdle for the company by approving a 41 mile reroute of Line 5 around the Bad River Reservation in Wisconsin, although the project remains politically sensitive.
Analysts say the extra Canadian heavy crude in the Midwest and Gulf Coast could influence regional price spreads while giving refiners a more dependable feedstock supply. Canadian producers are expected to benefit through more stable transportation capacity and support for their long term investment plans.
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