Enbridge Inc. and Energy Transfer have entered into an agreement to provide crude oil pipeline access to the eastern Gulf Coast refinery market from the Patoka, Illinois hub.
The project will involve the conversion from natural gas service to crude oil service of certain segments of pipeline that are currently in operation as part of the natural gas system of Trunkline Gas Company, LLC, a subsidiary of Energy Transfer Partners, L.P. and Energy Transfer Equity, L.P. The converted 30-inch diameter crude oil pipeline is expected to be in service by 2015. It will have capacity of up to 420,000 to 660,000 barrels per day (bpd) depending on crude slate and the level of subscriptions received in an open season to be conducted in the near future.
Enbridge and Energy Transfer would each own 50 per cent of the joint venture entity. Enbridge’s participation in the venture is subject to a minimum level of commitments being obtained in the open season, and on completion of due diligence.
Crude oil can reach the Patoka hub from both western Canada production and from the Bakken play in North Dakota through a variety of existing pipelines as well as through Enbridge’s Southern Access Extension pipeline, which is already under development. The eastern Gulf Coast market is a highly attractive market for Canadian and Bakken crude, but is not currently accessible by pipeline. The Trunkline conversion would create the first pipeline transportation option for transportation of crude oil to the eastern Gulf Coast from the midwest U.S.
Crude oil can reach the Patoka hub from both western Canada production and from the Bakken play in North Dakota through a variety of existing pipelines as well as through Enbridge’s Southern Access Extension pipeline, which is already under development. The eastern Gulf Coast market is a highly attractive market for Canadian and Bakken crude, but is not currently accessible by pipeline. The Trunkline conversion would create the first pipeline transportation option for transportation of crude oil to the eastern Gulf Coast from the midwest U.S.