Enbridge eyes 300,000 b/d expansion of Canadian Mainline crude pipeline

Enbridge is working to add some 300,000 b/d of new capacity on its Mainline crude oil system in response to a growing demand to move more barrels from Western Canada to demand centers in the US Midwest and US Gulf Coast, a senior company official said March 4.

"We have sanctioned C$2 billion [$1.38 billion] to reinvest in the Mainline [from 2025 to 2028] that will include a bunch of smaller projects to get a little more capacity of the nameplate steel and improve utilization ratios even further," Executive Vice President and President of Liquids Pipelines Colin Gruending said on the company's Investor Day webcast.

"We are at 96% utilization now having come from 90% and are looking to work out another 1% or 2%. It has become clear that the Mainline will be heavily relied upon as the workhorse of the egress fleet [out of the Western Canadian Sedimentary Basin] and it is full again and it will be for a long time," Gruending said.

New capacity additions on the Mainline will be carried out in equal phases, each of 150,000 b/d, with the midstream service provider earmarking C$1.5 billion in the first stage, which will include the installation of pumps and the use of drag-reducing agents with the new capacity being in service by 2027, he said.

"We have been operating in the basin [WCSB] for 75 years and are increasingly bullish with an above-consensus view on the basin's supply outlook of 700,000 b/d over the next 10 years. But, it could be higher, reaching 1 million b/d by 2035, which will be non-depleting for the most part with a low variable cost that will continue to produce [even] in a tariff situation," Gruending said.

The anticipated growth in WCSB production will primarily be heavy barrels flowing from multiple expansions underway through bite-sized projects and debottlenecking, which typically will add about 30,000 b/d to 40,000 b/d of new output.

Over the shorter term, leading oil sands producers like Suncor Energy are adding 100,000 b/d of new capacity, along with 150,000 b/d of oil equivalent by Cenovus, 170,000 boe/d by Canadian Natural Resources and 25,000 b/d by MEG Energy, to name a few.

The 3,000-mile Mainline pipeline system transports Canadian heavy and light barrels from Edmonton to Gretna on the Canadian-US border. There, the volumes flow onto Enbridge's Lakehead system, which supplies crude oil to refineries in the US Midwest and the USGC.

Mainline volumes for 2024 averaged 3.1 million b/d, exceeding the company's previous guidance by some 100,000 b/d, with fourth-quarter throughput averaging 3.079 million b/d, Enbridge said in its earnings call mid-February.

Besides the Mainline, Enbridge is also working on a 30,000-b/d expansion of the Express-Platte pipeline system at an estimated cost of C$50 million, Gruending said.

The Express line has a nameplate capacity of 310,000 b/d, and the 785-mile pipeline ships Western Canadian crude from Hardisty to Wyoming via Montana, serving refineries in Wyoming, Montana, Utah and Colorado in the US Midwest, according to the Canada Energy Regulator.

The pipeline also connects with the Platte crude oil pipeline system at Casper, Wyoming, and the Silvertip crude oil pipeline in Montana, CER said, adding that Platte crude volumes could flow to Missouri via Nebraska.

"It has probably been a sleeper in the portfolio and is doing 300,000 b/d quite reliably. But we have plans to gradually expand over time [by 2026]," Gruending said.

The company is also planning a 15,000-b/d expansion of its Southern Lights pipeline to ship additional diluents from the US for heavy oil producers and also add 150,000 b/d of capacity on its regional oil sands pipelines by 2028, Enbridge said.

Lastly, Enbridge is also out with an open season for 100,000 b/d on its Flanagan South pipeline, company spokesperson Gina Sutherland said separately in an e-mail March 4.

The 594-mile, 36-inch Flanagan South pipeline, with a nameplate capacity of 585,000 b/d, runs from Flanagan in Illinois to Cushing, Oklahoma. It has the option to provide interconnectivity from the US Midwest to the USGC, with the barrels being reloaded onto the 500-mile, 400,000 b/d Seaway pipeline, which originates from Cushing and delivers the volumes to Freeport, Texas.

"We are in the market with this presently, commercializing this [expansion]," he said.

Increasing USGC crude oil footprint

Enbridge is also focused on building new infrastructure in the USGC, mainly aimed at providing tidewater access to Permian Basin producers.

"We see 1 million b/d of supply coming out of Canada and another 1.5 million here. The Corpus value chain is full basically today, and as more barrels come on, there will be a need for extra infrastructure. We are expanding Gray Oak and Ingleside, which is in construction and have doubled our windows and recently started night-time loadings," he said.

The Enbridge Ingleside Energy Center is a prime crude export facility at the port of Corpus Christi in Texas, and the company is permitted for another 600,000 b/d of loadouts from that marine facility, he said.

EIEC is averaging loadings of 32 vessels each month, including VLCCs, Aframaxes, and Suezmaxes, Sutherland said.