Enbridge Inc. (ENB) − the general partner of Enbridge Energy Partners L.P. (EEP) − aims to expend $1.3 billion on its Line 6B in response to the surge in demand from refiners for Canadian crude.
The project involves the replacement of 160 miles of existing pipeline in Michigan as well as another 50 miles of line in Indiana. This comprises the second phase of a replacement plan of the line − stretching from Griffith, Indiana, to Sarnia, Ontario.
The first phase, comprising alternation of 75 miles of pipeline segment, is due for completion later in 2012.Line 6B was closed down for two months following a July 2010 oil spill incident that poured more than 20,000 barrels of crude oil into Michigan river.
In mid-April, Enbridge filed an application with the Michigan Public Service Commission for the replacement of 160 miles of pipeline. The altered line would encompass 110 miles of a 36-inch pipe and 50 miles of a 30-inch pipe. Additionally, 50 miles of pipeline is expected to be altered in Indiana.
Notably, the latest replacement is expected to nearly double the daily capacity of Line 6B to 500,000 barrels of crude oil from the present 240,000 barrels. This will eventually aid eastern Canadian refineries in response to growing crude supplies. The ongoing refinery upgrades and expansion in Michigan and Ohio would also lend support to the growing light crude production at Bakken Shale and Alberta.
Calgary, Alberta based Enbridge Inc. is Canada's No. 2 pipeline operator. It remains 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 crude oil supply from Western Canada to refining centers in the Upper Midwest of the U.S. and Ontario in Canada.
Enbridge Inc. hold a Zacks #4 Rank (short-term Sell rating) and Enbridge Energy holds 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
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