Enbridge considers re-reversing oil flow
and pipeline to west coast

Energy Processing Canada
Mar/Apr 2008

At the World Heavy Oil Congress in Edmonton in mid-March, Enbridge Inc.'s chief executive Pat Daniel said his company is looking at moving oilsands crude to the U.S. Northeast and Eastern Canada by re-reversing the flow of Line 9 to Montreal from Sarnia, Ontario or building a new pipeline. Enbridge, the country's second-largest pipeline operator, switched direction of Line 9's oil flow a decade ago so it could ship imported oil into central Canada.

According to Mr. Daniel, Line 9, which was built in the 1970s so refineries in Quebec could have secure access to Western Canadian crude, could be revamped for approximately $100 million, moving oilsands-derived crude to Portland, Maine, where it would be shipped down the East Coast of the U.S. by tanker.

By the late 1990s Line 9, which has a capacity of 240,000 barrels a day, sat idle, so Enbridge, with the support of major Ontario refiners, reversed the flow at a cost of about $90 million.

About a month earlier, Enbridge dusted off plans for its $4-billion Gateway pipeline project to Canada's West Coast in response to demand from producers and refiners wanting oilsands crude shipped to Asia. In 2006 the company put the 400,000 barrel a day line on the back burner to concentrate on expanding its crude oil pipeline network in the U.S.

But now Enbridge has convinced enough potential customers to fund the remaining costs to get Gateway to the regulatory approval stage, with an in-service target between 2012 and 2014. "The pull from the other end of Gateway initially was primarily from the Chinese, but in this initiative the Chinese are not participants, and the pull ranges from Japan down to Singapore, so much broader Southeast Asia interest," Mr. Daniel explained.

PetroChina signed a deal in 2005 to cooperate with Enbridge on the project to ship Alberta oilsands crude to the Pacific Coast. It also agreed to consider signing up for half the capacity.

Plans call for the proposed 1,200-kilometre pipeline to extend to a terminal in Kitimat, British Columbia, from Strathcona County in Alberta. An adjacent line would move condensate in the other direction. At Kitimat, as many as 20 tankers a month, including six very large crude carriers, would load the oil and ship it across the Pacific and possibly down to California.

Enbridge chief executive Pat Daniel said his company is looking at moving oilsands crude to the U.S. Northeast and Eastern Canada by re-reversing the flow of Line 9 to Montreal from Sarnia, Ontario or building a new pipeline.

Copyright Northern Star Communications Ltd. Mar/Apr 2008
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