CHICAGO Enbridge Inc. plans to invest $6.2 billion to bring new sources of crude oil to refinery markets in the Midwest, Ontario and Quebec.
The Calgary, Alberta-based energy company will fund a portfolio of projects in response to changing oil supply and demand patterns in North America, including stepped-up crude supplies from areas such as the Bakken shale.
The Bakken, which largely underlies North Dakota, has seen production more than triple over the past five years to 700,000 barrels per day and it could reach more than 1.2 million barrels per day in the next five years, Enbridge said, and additional crude oil production growth is coming from the Cardium and Viking shale formations in Alberta.
Enbridge expects its projects to be in service between 2014 and 2016.
Among them is a $2.5-billion expansion of the companys North Dakota infrastructure, which includes the construction of a 600-mile, 24-inch-diameter pipeline which will move Bakken oil from Beaver Lodge, N.D., to a terminal in Superior, Wis.
Another $800 million will fund the construction of a 165-mile, 24-inch-diameter pipeline between Flanagan, Ill., and Pakota, Ill., while a $500-million 76 mile, 36-inch-diameter pipeline will twin with an existing pipeline.
The cost of expanding existing pipelines and related infrastructure will total billions more, Enbridge said. Some projects, such as the boosting of capacity on Enbridges U.S. mainline system, come as Chicago-area refineries are shifting toward oil supplies from the west because prices are more competitive compared with crude from the Gulf Coast, the company said.
As nontraditional North American sources such as the Bakken have ramped up their oil production, energy firms have rushed to add capacity via rail or pipeline to bring the oil to refineries that historically have relied on other transmission systems or sources of oil (amm.com, Dec. 5).