Enbridge, a midstream energy company, and BP Pipelines have entered into an agreement to develop a new delivery system to transport Canadian heavy crude oil from Flanagan, Illinois to Houston and Texas City, Texas, using a combination of existing facilities and new pipeline construction where required.
The new delivery system is expected to be in service by late 2012 with an initial total system capacity of 250,000 barrels per day (bpd) into the Gulf Coast. Enbridge and BP intend to use the BP Number 1 System and other existing pipelines north of the Cushing, Oklahoma, crude oil hub with some new pipeline construction south of Cushing, to connect to markets in Houston and possibly Nederland, Texas.
Initial receipts at Flanagan, where the system would interconnect with Enbridge Energy Partners’s Southern Access pipeline, would be approximately 140,000bpd with deliveries to Gulf Coast markets. The remaining 110,000bpd would originate from interconnecting pipelines at Cushing.
Steve Wuori, executive vice president of liquids pipelines at Enbridge, said: This proposed project offers timely and economic access for shippers to the US Gulf Coast market. The new system would be a continuation of our phased approach to Gulf Coast market access, which has the objectives of minimizing capital cost and financial commitments required of shippers, maximizing use of existing pipelines and rights-of-way and ensuring attractive producer netbacks.