Enbridge Inc., Calgary, has reached a final investment decision to develop the Mainline Optimization Phase 1 project (MLO1) to add transportation capacity to the Mainline pipeline network and Flanagan South crude oil pipeline system (FSP).
The expansion is aimed at meeting customer demand for incremental egress for Western Canadian Sedimentary Basin crude oil and increasing deliveries of Canadian heavy oil to refining markets in the US Midwest (PADD II) and Gulf Coast (PADD III).
Expected aggregate capital cost of the project is US$1.4 billion, which when complete, is expected to add 150,000 b/d of Mainline system capacity, and 100,000 b/d of FSP capacity, the company said in a release Nov. 14.
MLO1 will increase capacity on the Mainline through a combination of upstream optimizations and terminal enhancements, Enbridge said, while pump stations and terminal enhancements planned for FSP are expected to increase capacity and utilize existing capacity on Seaway Pipeline, which is 50/50 owned by Enbridge and Enterprise Products Partners LP.
Enbridge said the FSP expansion is underpinned by long-term take-or-pay contracts for full-path service from Edmonton, Alta., to Houston, Tex.
The additional capacity is expected to be available in 2027.
Mainline Optimization Phase 2
Additional expansions are being considered as Canadian oil supply is expected to grow. In an earnings call Nov. 7, Colin Gruending, Enbridge’s executive vice-president, president-liquids pipelines, cited third-party predicitons that Canadian oil supply will grow by 500,000-600,000 b/d by the end of the decade.
Speaking about additional takeaway capacity expansions for Canadian producers, Enbridge’s president and chief executive officer, Gregory Lorne Ebel, said Mainline Optimization Phase 2 (MLO2) is progressing and that project “could now add another 250,000 b/d of additional capacity in 2028.”
“The second phase of Mainline Optimization will utilize capacity on the Dakota Access Pipeline, and we’re happy to announce that we’re teaming up with Energy Transfer to make that happen. So, stay tuned for more on MLO2, including an open season announcement early in the new year,” he said.