Enbridge, the Calgary-based crude oil carrier, will have to "wait and see" whether it faces a replay of rival TransCanada's Keystone XL regulatory battle as it seeks US State Department approval for changes to its Alberta Clipper (Line 67) heavy crude pipeline from Alberta to Superior, Wisconsin, CEO Al Monaco said Wednesday.
The plan involves increasing pumping capacity from the existing 450,000 b/d to 570,000 b/d and ultimately to 800,000 b/d, requiring amendments to the US State Department's Environmental Impact Statement prior to issuance of the presidential permit needed for a pipeline crossing the Canada-US border.
The C$800 million ($798 million) expansion includes five tanks with working volumes of 500,000 barrels to accommodate additional volumes expected in 2015 as part of Enbridge's wider strategy to open access to US and Canadian refineries for 1.7 million b/d of new capacity by 2016.
Monaco said he "won't deny there will likely be some focus" on the Alberta Clipper application from environmentalists and landowners who have stalled progress on Keystone XL, but argued it presents a "little bit of a different situation."
He noted the initial pipeline to deliver 450,000 b/d is already in the ground and does not involve any rerouting implications like Keystone XL. The planned work on pumping stations will not result in incremental greenhouse gas emissions, "so we expect the same outcome" as the approvals for Alberta Clipper's first phase, Monaco said.
Line 67 forms part of the existing Enbridge Mainline system in Canada and has received approval from Canada's National Energy Board to increase capacity at a cost of C$188 million in Alberta, Saskatchewan and Manitoba. The line is also integrated with the Enbridge Energy Partners' (EEP) Lakehead system in the US.
Subject to US approval, construction is scheduled to start this fall with an in-service date of 2014 in the US and 2015 in Canada.
SEAWAY PROJECT COULD BE AVAILABLE AHEAD OF SCHEDULE
On another aspect of its market access initiatives, Enbridge said twinning of its 400,000 b/d Seaway pipeline -- a 50-50 joint venture with EEP -- could be available in first-quarter 2014, ahead of the previously anticipated startup in the second half of the year.
The project is targeting 850,000 b/d of capacity from Cushing, Oklahoma, to Gulf Coast refineries.
In Q1 Seaway ran at reduced rates due to third-party takeaway constraints, Enbridge said in an earnings statement, without giving details.
The company said those constraints are "expected to be eliminated in the fourth quarter of 2013 when a lateral from the Seaway Jones Creek tankage to the ECHO crude oil terminal is completed.
ENBRIDGE RECONSIDERING INTERNATIONAL OPTIONS
Monaco said Enbridge is also exploring possibilities to move crude oil in Colombia and natural gas in Australia after previously selling off its international assets.
Monaco said Colombia presents similar opportunities to Western Canada 10-15 years ago along with a "very good environment from a stability and fiscal" standpoint.
"We are working on one or two projects that we think have very good legs," he said.
Monaco described Australia as "very competitive, but the fundamentals are very solid on the gas side, so we are looking there as well."