The Enbridge Mainline, by far the largest transportation network for growing Western Canadian crude oil supplies to the U.S. Midwest, Gulf Coast and Eastern Canada, recently received regulatory approval for the tolls that it charges shippers for using the massive pipeline system. As we discuss in today’s RBN blog, the Canada Energy Regulator’s (CER) thumbs-up ensures another five years of shipping cost predictability and comes as the Canadian oil pipeline landscape is about to permanently change with the pending startup of the 590-Mb/d Trans Mountain Expansion Project (TMX).
Much of the headline oil pipeline news out of Canada in recent months has been centered around the Canadian government’s long-delayed and vastly over-budget TMX, which will significantly increase pipeline capacity to Canada’s West Coast. At long last, TMX now looks set to begin receiving crude oil shipments in the form of linefill in a matter of weeks. Equally important, though, was the March 4 news that the CER had placed its stamp of approval on a negotiated settlement between Enbridge and its customers concerning the tolls that will be charged for shipping on the midstream giant’s Mainline through 2028.
Before we review the timeline that brought us to the CER’s recent action, let’s take a quick tour of the Enbridge Mainline System and review its critical role in North American crude oil transportation and refining. The array of pipelines known collectively as the Enbridge Mainline (orange lines in Figure 1 below) handles about 70% of all the crude shipped from Western Canada by pipeline into the U.S. Midwest. The system’s parallel Lines 1, 2, 3, 4 and 67 transport a variety of heavy and light crude oil and NGLs from Edmonton and Hardisty, AB, to Clearbrook, MN, and Superior, WI. From there, other Mainline pipes move crude to the Flanagan hub in north-central Illinois (Line 61), the Chicago area (Lines 6, 14 and 64), Michigan (Lines 5 and 78) and Ontario (Lines 5, 7, 11 and 78). The U.S. side of the Mainline is often referred to as the Lakehead System.
Figure 1. Enbridge Mainline and Other Selected Pipelines. Source: RBN
Join Backstage Pass to Read Full Article
