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Steel
February 27, 2008
Natural Resources
Enbridge Inc. gets approval for Southern Lights diluents pipeline
An Alberta company received approval for a pipeline that will carry gasoline-like liquids called diluents from U.S. refineries to Edmonton.
Enbridge Inc. announced on Feb 20 that the National Energy Board (NEB) has approved its application for Southern Lights, which is a proposed pipeline from the U.S. Midwest to Edmonton, Alberta.
The Calgary-based company plans to build a new 20-inch diluent pipeline from Chicago to Clearbrook, Minnesota. The project also involves reversing the flow of Enbridge’s Line 13, which transports light synthetic crude oil from Edmonton to Clearbrook, Minnesota.
The reversed line will transport diluent received at Clearbrook to the Edmonton area.
“We are very pleased that this major milestone in the project has been achieved”, said Patrick D. Daniel, president and CEO of Enbridge, Inc.
“By increasing diluent import capacity, Southern Lights is very important to the economic development of Western Canadian crude oil production. As the NEB acknowledged, Southern Lights is an innovative and cost-effective solution to transport diluent.”
The Alberta Federation of Labour (AFL) is critical of the approval of Enbridge’s pipeline project, which will bring diluents up to Alberta so Bitumen can flow to the U.S.
“With our provincial government’s quiet blessing, big oil companies have been building a machine to take jobs and bitumen out of the province. This pipeline will provide the lubricant that will literally set the whole process in motion,” said Gil McGowan, AFL president.
“(It is) shocking that, half-way through the provincial election campaign, Premier Stelmach has yet to announce a plan designed to promote Alberta-based value-added oil sands production.”
The AFL wants the government to stop allowing companies to export raw bitumen without first upgrading or refining it in Alberta.
“If he continues to stand on the sidelines, pretty soon, the game is going to be over and Albertans will be the losers,” he said.
The project involves laying 1,085 kilometres of 16-inch pipe from the Chicago area to Clearbrook, in northwestern Minnesota.
The rest of the route will use an existing oil pipeline. Enbridge plans to replace part of the existing pipeline with a new 20-inch line, in order to increase its capacity to pump Alberta crude to the U.S. Midwest.
The project, which will run through Illinois, Wisconsin, Minnesota, North Dakota, Manitoba, Saskatchewan and Alberta, will have a capacity of 180,000 barrels-per-day (bpd).
It was originally expected to cost less than US$1 billion. However, rising steel pipe prices and other factors have pushed the price up to US$2.2 billion.
Enbridge Inc. operates the world’s longest crude oil and liquids transportation system in Canada and the U.S.
The company operates Canada’s largest natural gas distribution system, which provides distribution services in Ontario, Quebec, New Brunswick and New York State.
Enbridge employs about 5,500 people, primarily in Canada, the U.S. and South America.
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