Enbridge Aims to Reach Every Major Oil Market in North America

Researched by Industrial Info Resources (Sugar Land, Texas)--North America has five major oil markets: the Gulf Coast, the West Coast, the East Coast, Chicago/Midwest, and Cushing, Oklahoma. Much like how all drains eventually lead to the ocean, all pipelines eventually lead to one of these markets. Pipeline owner and operator Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) is unique in that it currently has or has planned one or multiple projects to transport oil to every major market.

Enbridge is involved in some projects only as an owning interest and not as an operator, but it still stands that the company plans to reach every major oil market in the U.S. and Canada.

Much of Enbridge's reach is still in planning phases. It's Northern Gateway pipeline project, which would bring up to 525,000 barrels per day (BBL/d) of crude oil to the west coast of British Columbia and 193,000 BBL/d of condensate back to Alberta, was only recently granted conditional approval by Canada's federal government. If the project meets all 209 conditions placed on it by the government, Enbridge could reach the west coast and export its crude oil to Asian markets by the end of 2017.

While Northern Gateway has proven a regulatory hurdle and has taken a long time to permit due to its size and publicity, Enbridge has several projects that allow it to access other, smaller markets. Its reversal and expansion of lines 9 and 9B will give Enbridge the ability to ship crude oil to eastern Canadian refiners in Quebec. These projects do not require any trenching or new pipe; instead, they increase capacity by adding pumps and other equipment to existing facilities. As such, their environmental footprint is much smaller and their regulatory hurdles are much lower, allowing them to be completed in a much timelier manner.

The largest oil market in North America is the Gulf Coast. Naturally, Enbridge has plans to connect to this market; however, a possible edge on its competitors is the seemingly roundabout route by which Enbridge sends its crude down south. Oil sent by Enbridge's mainline can reach four of the five markets by being redirected at one of several Enbridge terminals in the Chicago/Midwest market. This gives Enbridge's shipper clients access to their pick of markets.

Enbridge's mainline feeds into the Chicago/Midwest market from Canada. From there, the oil is then either sent east to Quebec refineries, used locally by Chicago-area refiners, or sent south via the spearhead south or planned Flanagan South pipelines to Cushing, the self-proclaimed pipeline crossroads of the world. From there, Enbridge can send crude to the Gulf Coast via its existing Seaway I and under-construction Seaway II pipelines.

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