Enbridge Inc. (TSX:ENB) (NYSE:ENB) and Enbridge Energy Partners, L.P. (NYSE:EEP) (the "Partnership") today announced that they are commencing construction of their 400,000 barrel per day (bpd) Southern Access expansion project. The expansion received strong shipper support during last summer's Open Season and has been endorsed by the Canadian Association of Petroleum Producers (CAPP). CAPP's endorsement will permit Enbridge and the Partnership to file negotiated settlements for Canadian and U.S. regulatory approvals of tariff rate surcharges, using a cost-of-service-based tolling methodology. Fieldwork will commence immediately to ensure completion in early 2009, with capacity increases to start in 2007.
The Canadian portion of the expansion project from Hardisty, Alberta, to the international border near Neche, North Dakota, will be undertaken by Enbridge Inc. on its Canadian mainline system, at a cost of approximately US$135 million in 2005 dollars.
The U.S. portion of the expansion will be undertaken on the Partnership's Lakehead System with the first stage to add 44,000 bpd of capacity in 2007 and up to an additional 146,000 bpd by early 2008. The first stage includes a new 30-inch pipeline between Superior and Delavan, Wisconsin, along with pump station enhancements upstream and downstream of this segment. The expansion project's second stage will add additional upstream pumping capacity and new pipeline from Delavan to Flanagan, Illinois, with completion in early 2009. At Flanagan, the new line will have access to Chicago and will interconnect with Enbridge Inc.'s Spearhead Pipeline to provide access to Cushing, Oklahoma. Completion of the total Southern Access expansion project will create a new 454-mile pipeline and will add 400,000 bpd of incremental capacity to the Lakehead System. The total cost of the U.S. portion of the expansion is currently estimated at US$815 million (2005 dollars) including estimated tankage requirements.
The expansion project is the first part of the overall Southern Access Program, which also involves an extension of the mainline system from Flanagan south to the major pipeline hub at Patoka, Illinois. The extension is planned to provide 300,000 bpd of capacity to move Canadian crude to new markets south of Chicago, at a cost of approximately US$250 million. The extension will be undertaken by Enbridge Inc. but will be integrated with the Partnership's mainline system for tolling purposes.
Patrick D. Daniel, President & Chief Executive Officer of Enbridge Inc., said, "We've worked closely with customers to arrive at the optimum pipeline solution to meet their needs to access markets of choice. The Southern Access expansion is one of the cornerstones of a broader market access strategy undertaken by Enbridge and the Partnership to provide timely, economical, integrated transportation solutions to connect growing supplies of production from Alberta's oil sands to key refinery markets in the U.S. Midwest and beyond."
Daniel added, "The mainline expansion will ensure adequate capacity to Chicago, at favorable tolls, through 2009. With the mainline expansion component of the strategy now under way, our next priority will be to finalize discussions with shippers and CAPP on the Southern Access extension. Together the Southern Access expansion and extension form a pipeline network that will provide lower tolls than any other alternative for transportation of Canadian crude to U.S. destinations beyond Chicago, including Patoka, Wood River, Cushing and the U.S. Gulf Coast."
Additional information on the Southern Access Program is posted at www.enbridgepartners.com.ABOUT ENBRIDGE ENERGY PARTNERS
Enbridge Energy Partners, L.P. owns and operates a diversified portfolio of crude oil and natural gas transportation systems in the U.S. Its principal crude oil system is the largest transporter of growing oil production from western Canada. The system's deliveries to refining centers in the U.S. Midwest account for approximately 10 percent of total U.S. oil imports; while deliveries to Ontario, Canada satisfy approximately 60 percent of refinery demand in that region. The Partnership's natural gas gathering, treating, processing and transmission assets, which are principally located onshore in the active U.S. Mid-Continent and Gulf Coast area, deliver more than 2 billion cubic feet of natural gas daily. Enbridge Energy Management, L.L.C. (NYSE:EEQ) (www.enbridgemanagement.com) manages the business and affairs of the Partnership and its principal asset is an approximate 18 percent interest in the Partnership. Enbridge Energy Company, Inc., an indirect wholly owned subsidiary of Enbridge Inc. is the general partner and holds an approximate 11 percent interest in the Partnership.ABOUT ENBRIDGE INC.
Enbridge Inc. (www.enbridge.com) is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States, the world's longest crude oil and liquids pipeline system. Enbridge also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, which provides distribution services in the provinces of Ontario and Quebec, and in New York State; and is developing a gas distribution system for the Province of New Brunswick. Enbridge is a Canadian company and its common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB.LEGAL NOTICE
When used in this news release, words such as "anticipates", "expects", "plans", "will" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions pertaining to factors such as: (1) changes in the demand for, or the supply of, and price trends related to crude oil and natural gas liquids; including the rate of development of the Alberta Oil Sands; (2) changes in or challenges to Enbridge Partners' tariff rates; (3) the effects of competition, including by other pipeline systems; (4) regulatory approvals; and (5) performance of other parties. Reference should also be made to Enbridge Partners' filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the most recently completed fiscal year, for additional factors that may affect results. These filings are available to the public over the Internet at the SEC's web site (www.sec.gov) and via Enbridge Partners' web site.
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SOURCE: Enbridge Inc.