Lakehead System

Delays to the Enbridge Sandpiper project bringing greater volumes of Bakken crude onto the Enbridge Mainline system at Superior, WS threaten to limit the supply of crude to feed refineries in Quebec when Enbridge’s Line 9B reversal project comes online in November 2015. The market impact could push crude prices higher in North Dakota. Today we discuss the crude supply picture and possible impact when Line 9B opens up.

After a year’s delay due to permit issues, Enbridge now expects the expanded and reversed 300 Mb/d Line 9B pipeline to Montreal will come online next month (November 2015). The pipeline is an important cog in Enbridge’s Eastern Access and Light Oil Market Access expansion projects and will supply mostly light crude to two refineries in Quebec. As we explain today, the payload will travel a winding route to get to Montreal.

Eastern Canadian refineries are importing record volumes of light US crude - 263 Mb/d in May 2014 according to the Energy Information Administration (EIA). By the end of 2014, pipeline reversals and expansions to the Enbridge network will increase the flow of light crude to eastern refineries from Western Canada and North Dakota. The result could be even more imports from the US. Today we continue our series reviewing the extent and impact of Enbridge projects to move crude east.

RBN expects total Canadian crude production to grow to more than 5 MMb/d by the end of 2019 – an increase of 1.4 MMb/d over 2013. Most of that new production will be heavy bitumen from Western Canada that will find its best market at US Gulf Coast refineries configured to process that type of crude. Trouble is pipeline capacity between the production regions in Alberta and the Gulf Coast is in short supply – a situation made worse by permit delays to the Keystone XL project.  A less high profile but just as critical set of projects, parts of which are about to come online expand existing Enbridge and Enterprise pipelines between Canada and Texas. Today we begin a two part series describing the impact of these new systems.