Enbridge Inc. is going ahead with a $560-million expansion of its Bakken pipelines, adding 145,000 barrels per day of new capacity from one of North America's fastest-growing oil producing regions, the company said Monday.
Enbridge will expand its North Dakota and Saskatchewan pipeline systems in order to handle rising oil output from the Bakken field, which spans the Canadian province of Saskatchewan, and the U.S. states of Montana and North Dakota.
The project will provide much-needed pipeline space in the region, where producers have turned to expensive truck or rail shipment to get their oil to market because of a shortage of space on existing lines.
"Based on current activity and growth plans we anticipate that additional pipeline capacity beyond this initial Bakken expansion program will soon be required by producers," Steve Wuori, president of Enbridge's liquids pipelines business, said in a statement.
The expansion was first announced in August, but Enbridge said additional shippers have since signed long-term contracts for space on the line. Of the total expansion, 100,000 bpd is spoken for, the company said.
Other pipeline companies are also moving to build new lines into the region. TransCanada Corp said last month it plans a $140-million link from the U.S. Bakken region to its planned Keystone XL pipeline running to the Gulf of Mexico coast, which will carry as much as 100,000 bpd.
Calgary-based Enbridge, whose pipelines ship the bulk of Canada's oil exports to the United States, said the expansion program will be handled through two affiliated companies: Enbridge Energy Partners LP and Enbridge Income Fund Holdings Inc.
The company said 25,000 bpd of the new capacity will be available early this year with the remaining 120,000 bpd in place by late 2012.