Enbridge Energy Partners, L.P. (EEP) and Enbridge Inc. (ENB) have struck a deal to facilitate crude oil producers in two projects. These projects in western Canada and the U.S., both pending regulatory approvals, are slated to come on stream in late 2012.
The deal calls for a $100 million capacity expansion of Line 5 to transport 50,000 more barrels of crude oil per day. Line 5 runs across the Upper Peninsula, along the lake bottom at the Straits of Mackinac, across the northern Lower Peninsula and under the St. Clair River to Sarnia, Ontario. The expansion mainly aims to meet the surge in demand in upper Midwest and Ontario.
Additionally, Enbridge plans the reversal of a part of Line 9 in western Ontario to allow eastbound crude oil transportation from Sarnia to as far as Westover, Ontario. This project will require approximately $20 million.
The economically viable ventures involve only upgrades or modifications of facilities and do not necessitate any additional pipeline installation. Moreover, this is intended to lend support to the increasing light crude production at Bakken Shale and Alberta to meet refinery needs in Michigan, Ohio and Ontario.
Recently, Enterprise Products Partners L.P. (EPD) and Enbridge Inc. entered into a joint venture agreement to build a pipeline –– Wrangler –– connecting the oil-storage hub of Cushing, Oklahoma, to refiners on the Gulf Coast. With an initial capacity of 800,000 barrels a day, Wrangler is expected to be the largest pipeline connecting the region, costing about $1.5 billion to $2 billion.
Calgary, Alberta based Enbridge Inc. is Canada's largest oil pipeline operator. It is engaged in energy transportation and distribution.
Houston, Texas-based Enbridge Energy Partners is engaged in the gathering, processing and transmission of natural gas and crude oil. The partnership is best known for its ownership of the Lakehead System, one of the world’s longest petroleum pipeline systems.
This system is the U.S. portion of the main artery for the delivery of crude oil supply from Western Canada to refining centers in the Upper Midwest of the U.S. and Ontario in Canada. The partnership highlighted that the latest expansion project will provide additional distributable cash flow once the project is placed into service.
Both Enbridge and Enbridge Energy hold a Zacks #3 Rank, which is equivalent to a short-term Hold rating.
ENBRIDGE EGY PT (EEP): Free Stock Analysis Report
ENBRIDGE INC (ENB): Free Stock Analysis Report
ENTERPRISE PROD (EPD): Free Stock Analysis Report
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