Page 14 ■ Thursday, November 24, 2011


NATION & WORLD Enbridge to provide early access to Gulf


By ROB GILLIES Associated Press


Nov. 16 it will provide access to U.S. Gulf Coast refi neries with a new pipeline that will help unclog a bottleneck of oil in the Midwest, an announcement that helped oil prices hit $100 per barrel in North America for the fi rst time in nearly four months. Calgary, Alberta-based Enbridge said


it agreed to pay $1.15 billion to buy half ownership in the Seaway crude pipeline system between Texas and Oklahoma from ConocoPhillips. Enbridge said they’ll reverse the di-


rection of crude oil fl ows on the Seaway pipeline to enable it to transport oil from Cushing, Oklahoma, to the Gulf Coast. The news is a major development


for the North American oil market. Oil companies are eager to ship oil to the massive refi nery hub of Texas as oil is bottlenecked in Cushing because of a glut of supply that has driven down the price for oil in North America. A lack of infrastructure out of Cush-


TORONTO — Enbridge Inc. said


ing has led to a price differential between oil traded in North America and the rest of the world. The spread in prices between West Texas Intermediate and Brent, which is used to price many for- eign oil varieties, narrowed after the an- nouncement to $8.92 from $12.38 before the announcement. Enbridge CEO Pat Daniel said in a


telephone interview with The Associated Press that he expects the spread to nar- row further as the pipeline goes online next year.


percent jump in benchmark crude pric- es. WTI ended the day at $102.59, the highest since May. Enbridge’s announcement comes


The announcement sparked a three


after the U.S. government delayed a de- cision on a federal permit for Enbridge rival TransCanada’s proposed pipeline that would take oil from the Alberta oil sands and Cushing to the refi neries on the Gulf Coast. A decision on whether to allow it isn’t expected until the fi rst quar- ter of 2013.


Daniel said his new pipeline line could be online with an initial capacity


The new pipeline line could be online with an initial capacity of 150,000 barrels per day by the second quarter of 2012


of 150,000 barrels per day by the second quarter of 2012. That capacity would be expanded to 400,000 to 500,000 barrels per day in 2013. Daniel said the fi nalization of the deal and the U.S. announcement to delay a decision on TransCanada’s pipeline is “coincidental” but he acknowledged they are competing pipelines. “We have the advantage of an existing


asset,” Daniel said. “We consider it a very big advantage.”


Texas Gulf Coast refi neries to offset sup- plies of imported crude. Rival TransCanada has been looking to ship oil to Gulf Coast refi neries with


EMPLOYMENT Daniel said his pipeline will allow


its proposed Keystone XL pipeline as the Gulf Coast refi neries look to Canada as their oil import contracts from Venezu- ela and Mexico expire. Enbridge will become partners with


Enterprise Products Partners LP, who own the other 50 percent and will con- tinue to operate the pipeline system and storage facilities. TransCanada, meanwhile, said Nov. 16 that it may be able to speed up the Cushing-to-Texas leg of Keystone XL, but that would require approval form the U.S. State Department. Russ Girling, TransCanada’s president and CEO, said it’s still early in the process. Girling also said he expects the bottle-


neck in Cushing to continue because of new production from Canada and the Bakken fi eld in the northern Midwest U.S and said both can be used. Daniel also said there needs to be ad- ditional pipeline capacity. “We know that production is growing in the Bakken and production is grow- ing in the oil sands so there will be incre- mental capacity needed,” Daniel said.


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