Oil Sands Truth: Shut Down the Tar Sands

Enbridge and BP plan pipes to get Canada oil to Gulf

Enbridge and BP plan pipes to get Canada oil to Gulf
Fri Aug 29, 2008 12:40pm EDT

CALGARY, Alberta (Reuters) - Enbridge Inc (ENB.TO: Quote, Profile, Research, Stock Buzz) and BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) plan to spend up to $2 billion expanding their pipeline systems to ship growing volumes of Canadian crude oil to the U.S. Gulf Coast, they said on Friday.

Enbridge, best known as operator of the main artery for Canadian oil exports, and BP, the British oil major, said they aim to develop a system to ship 250,000 barrels of oil a day to Texas City, Texas, from Flanagan, Illinois, by 2012.

The project would entail building new pipelines as well as using some already in service.

For Enbridge, it would coincide with its plans to get Western Canadian crude to Gulf Coast refineries by reversing the flow of two lines, allowing access to the Atlantic Seaboard. From there, it could be shipped to the Gulf by tanker.

That plan, called Trailbreaker, would cost about C$350 million ($333 million) and be in service in 2010.

With massive investments in Alberta's oil sands, production of that unconventional resource is forecast to nearly triple to 3.4 million barrels a day by 2015, and the industry is working to expand its markets.

For the new pipeline plan, the companies intend to use the BP 1 System and other pipelines north of the Cushing, Oklahoma, oil hub and build some new pipeline south of Cushing. There it would connect to markets in Houston and possibly Nederland, Texas, they said.

The system would link up at Flanagan with Enbridge's Southern Access pipeline, where about 140,000 barrels a day would be injected. The remaining 110,000 would come from interconnecting lines at Cushing.

The cost of the initiative is estimated at $1 billion to $2 billion.

($1=$1.06 Canadian)

(Reporting by Jeffrey Jones; editing by Rob Wilson)

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