26-11-2012

Enbridge to partner in delivering Bakken crude by rail to Philadelphia refining markets

Enbridge Inc today announced its U.S. subsidiary, Enbridge Rail L.L.C., has entered into an agreement with Canopy Prospecting Inc to create the Eddystone Rail Company to jointly develop a unit-train facility and related local pipeline infrastructure near Philadelphia, Pennsylvania to deliver Bakken and other light sweet crude oil to Philadelphia area refineries. The project is expected to handle 80,000 barrels per day (bpd) in the third quarter 2013 and can ultimately be expanded to receive up to 160,000 bpd for subsequent transport by barge or pipeline to nearby refineries as early as mid-2014.

Enbridge will own 75% of the joint venture and serve as operator during construction and operation of the facility. The total estimated capital cost of the project is approximately US$68 million, including interest during construction. Project scope includes leasing portions of Exelon Generation's Eddystone power generation facility and reconfiguring existing track to accommodate 120 car unit-trains, installing crude offloading equipment, refurbishing an existing 200,000 barrel tank and upgrading an existing barge loading facility. Additional storage and pipelines connecting Eddystone to Philadelphia area refineries are under development.

"The Eddystone Rail Company will be the largest unit-train facility able to receive North Dakota Bakken and other light sweet crudes directly into Philadelphia area refineries" said Jack Galloway, President of Canopy Prospecting, Inc. "At nearly one million barrels per day, the region is second only to Houston in the concentration of light sweet refining capacity. Eddystone will be the first to provide access directly to those refineries from a rail facility."

In early 2013, Enbridge's Bakken Expansion Program will add 200,000 bpd of increased export pipeline capacity from the Bakken - 80,000 bpd into Berthold and 120,000 bpd into Cromer, Manitoba - taking Enbridge's total capacity from North Dakota to 475,000 bpd.

"Rail is the fastest way to provide increased export capacity out of the Bakken, creating a near-term solution to transportation bottlenecks and the resulting crude oil pricing differentials," said Stephen J. Wuori, President, Liquids Pipelines, Enbridge Inc. "Eddystone is an important step in our longer-term strategy to accommodate the anticipated growth of light crude oil supply and to provide Bakken producers and PADD I refiners cost-effective capacity to premium markets on the eastern side of North America.

"At the same time, Enbridge's Berthold and Eddystone rail projects will create employment and help the U.S. economy by delivering growing supplies of domestic crude to these once idle or under-utilized U.S. refineries, which have been dependent on more expensive foreign imports."

Enbridge will proceed with customary environmental, local and regulatory approvals to facilitate in-service in the third quarter of 2013. The company expects to begin stakeholder consultation for the Eddystone project in November 2012 and will share information and seek input from the community surrounding the rail facility. Enbridge is committed to safety and protecting the environment during each phase of project construction and operation.