Enbridge's Line 67 Expansion Moves Forward, Spelling Good Things for Seaway

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Researched by Industrial Info Resources (Sugar Land, Texas)--Of all the pipeline projects that seek to increase the flow of oil sands crude across the U.S.-Canadian border, Enbridge Incorporated's (NYSE:ENB) (Calgary, Alberta) Line 67 Mainline/Alberta Clipper expansion project is the closest to realization. Enbridge has named its contractors for Phase II of the project, which will expand the line to 800,000 barrels per day (BBL/d), and has begun work on the delayed Phase I on the U.S. side.

As the Canadian side of the pipeline expansion nears completion, the Seaway pipeline expansion, a pipeline project jointly owned by Enbridge and Enterprise Products Partners Incorporated (NYSE:EPD) (Houston, Texas), and other dependent projects also are coming closer to realization.

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The Seaway crude oil pipeline has been in the news repeatedly since it was first announced in late 2011 that Enterprise and Enbridge would reverse the line and expand it. Construction of the Seaway II pipeline, a twin of the original line, and the last phase of that expansion, was finished earlier this summer. However, the line has lain idle due to a lack of oil to be run through it. As such, the line is not expected to begin normal commercial operations until October. The oil that was supposed to fill the line was due to come down via Enbridge's pipeline system.

The first wave of expansion on the U.S. side of Line 67 originally was set to be complete in July 2014. However, it faced unexpected permitting delays that forced those initial pump additions in Phase I to be pushed back almost an entire year to coincide with the construction of the expansion's second phase. So, while the Canadian side of Line 67 proceeded as normal and is nearing completion on its initial phase, the U.S. side has not been able to keep pace.

However, the good news for Gulf Coast refiners is that increased crude oil from Canada and the Bakken Shale is expected to make its way south this fall. Enbridge has been working on its 600,000-BBL/d Flanagan South project for some time now, and it is expected to begin operations this fall. The added capacity flowing through Enbridge's Flanagan South to Cushing, Oklahoma, is likely to be the oil that will fill Seaway II in October.

Following that, as the U.S. side of Line 67 enters service in mid-2015, Seaway II should find itself with no lack of product to ship. Line 67's Phase I will begin construction by the end of this month, with Phase II right on its heels in September, according to Industrial Info data.

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