Enbridge Inc. plans to increase the capacity of the pipeline by about 825,000 barrels per day over the next five years – including approximately 400,000 b / c next year – as the company works to ease congestion in exports that have cut prices in the Western Canadian oil industry.
The company, however, wants refiners and manufacturers to commit to long-term contracts for the delivery of specific volumes to their main pipeline system, which is currently transporting US 2.85 million barrels of crude per day.
At a New York investor day conference on Tuesday, the Calgary-based company said it expects oil companies to add more than one million barrels per day of production over the next decade, and plans to expand its export network to received more Canadian crude oil on US Midwest and Persian Gulf markets. Enbridge is currently negotiating with oil and refineries to reorganize the way it provides space in its core system with the intention of having 90 percent of the volume covered by long-term contracts.
"We will go as quickly as possible," Enbridge CEO Al Monaco said in a talk with reporters. "We understand the importance of market capacity, we already do a lot of things on this front … But we are moving very, very quickly to everything we can."
Western Canadian oil producers have been forced to accept steep discounts on their crude crude oil prices as the capacity of the railways and railways has failed to cope with rising production. The difference between the Western Canadian selection, which is an indicator of oil sand and North American gas station West Texas Intermediate, has risen to $ 50 a barrel this fall, although since then it has narrowed to $ 12.50 a barrel for delivery in January , according to NetEnergy, a Calgary-based trading company. This improvement happened after some large refiners in the Midwest returned from discontinuing maintenance after Alberta's Prime Minister Rachel Nottley ordered a 325,000-barrels production a day, starting in January.
Enbridge quietly added 450,000 barrels per day of capacity in its core system to the United States over the past three years, although it worked for regulatory approval to renew its old line 3, which was operating below its potential capacity.
The company gained approval from the public service regulator in Minnesota to continue its line 3 upgrade, which will add 325,000 barrels per day to the volume of Western Canadian exports but still faces appeals from local government activists. Guy Jarvis, president of the Enbridge fluid pipeline business, said he was confident in completing this project by the end of next year.
Also, the company will add up to 100,000 barrels per day in export capacity next year, largely by relocating North Dakota producers to its main system and other pipelines and adding rain resistance agents that will accelerate the flow of crude, within five years it expects to increase its capacity by 450,000 barrels per day, in addition to line 3 work.
Enbridge transferred to North American gas pipelines with $ 28 billion in savings from Houston-based Spectra Energy Corp. in 2017, but announced on Tuesday that it was spending $ 1 billion to add liquid capacity. He pays $ 265 million to acquire the terminal and pipeline in Northeast Alberta from Athabasca Oil Corp. and $ 600 million in 22.75% interest in the Gray Oaks Fluid Pipeline to deliver light crude oil from the thriving Persian basin in West Texas to Corpus Christi, Texas Enbridge also works with partners to build a Coastal Terminal for Export of crude oil that will fuel North American crude oil in very large commodities (VLCC) in the Gulf of Mexico.
When presenting to investors, Mr Jarvis said the new long-term billing method is still the subject of negotiation with shippers and approval by regulators. He said Enbridge would protect smaller manufacturers by offering easier terms than some of their competitors.
Mr. Monaco said North America's energy infrastructure required significant investments to cope with the rapidly growing oil and gas production and that Enbridge is strategically located in the largest markets for both commodities.
The company announced a 10% increase in its dividend for 2019 and expects another 10% increase in 2020.
The price of Enbridge was almost unchanged on Tuesday, rising three cents to $ 42.12 on the Toronto Stock Exchange.