Enbridge Inc. is spending $200 million to further expand a regional pipeline system serving the oil sands, as producers pour more and more investment into new projects.
CALGARY: Enbridge Inc. is spending $200 million to further expand a regional pipeline system serving the oil sands, as producers pour more and more investment into new projects.
The Calgary-based crude transporter said today it will expand its Athabasca Pipeline to a maximum capacity of about 570,000 barrels per day by 2014.
A key advantage of the regional system is that it can be expanded at a relatively low cost, said Stephen Wuori, the executive in charge of Enbridge’s liquids pipelines.
“Given recent announcements of continued growth and investment in the oil sands, this is an opportune time to capture construction economies by undertaking a single large expansion project,” he said in a release.
Enbridge has $2.4 billion of commercially secured expansions or additions planned to the oil sands system, which will go into service between 2011 to 2014.
A few months ago, it announced deals with oil sands producers Husky Energy Inc., Cenovus Energy Inc. and Suncor Energy Inc. to accommodate output from their projects.
The expansion is required to accommodate additional contractual commitments since the initial expansion was announced in September, Enbridge said.
Enbridge chief executive officer Pat Daniel said he does not foresee a labour crunch in northern Alberta, as both the pipeline and project expansions kick into gear.
“Generally speaking, pipeline crews tend to be a separate labour force and there aren’t that many major pipeline projects underway in North America right now compared to the situation a couple of years ago,” he said.
Enbridge is the leading pipeline operator in the Fort McMurray to Edmonton corridor and says it is well positioned to increase capacity by connecting new oil sands developments to mainline pipelines.
The Athabasca Pipeline is a 540-kilometre structure that has been in operation since 1999.
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