Enbridge Inc. has branched out again in Alberta's oilsands, agreeing to build a $370-million oil pipeline connecting new Suncor Energy production to the pipeline's existing Waupisoo system, the Calgary-based company said.
The new 95-kilometre line, dubbed Wood Buff alo, will flow crude between Enbridge's Athabasca and Cheecham terminals and run parallel to its existing 570,000-barrel -per-day Athabasca pipeline.
The latest investment brings Enbridge's spending in the region to $1.6 billion in the past year.
Oilsands represent a major growth area for the company, which completed several major projects last year, including the 1,600-kilometre Alberta Clipper oil pipeline to Superior, Wis.
Suncor, the oldest oilsands operator in the world, brought Enbridge to the oilsands more than a decade ago as an anchor shipper on its then-proposed Athabasca system.
"We are fortunate to have Suncor as a shipper and to benefit from their continued oilsands growth and need for pipeline and terminaling services, including this latest opportunity," said Steve Wuori, Enbridge vicepresident of liquids pipelines, in a statement.
Thursday's announcement came as the corporation made preparations to restart its Line 6B oil pipeline, which ruptured late July, tainting Michigan waterways.
Enbridge Energy Partners, the Houston-based affiliate running the line, also recently won a toll dispute with Suncor on the Alberta Clipper line after U.S. regulators rejected the producer's petition to freeze the surcharge.
Back in Canada, analysts said the Wood Buffalo project, expected to come into service mid-2013, would further consolidate Enbridge's dominant position in northeast Alberta.
The company has spent $1.6 billion in the past year to expand its oilsands presence, second only to regional rival Inter Pipeline Fund's $2-billion investment, said Steve Paget, with FirstEnergy Capital Corp.
"We've been pretty impressed with Enbridge's regional position in the oilsands," Paget said. "They've had an excellent platform for expansion, particularly for common carriers."
The strategy to allow multiple shippers on its lines rather than a single dedicated producer has served the company well, he said.
Enbridge has bulked up its web of infrastructure in the northeast corner of the province since 1999 with the 540-km Athabasca and 340-km Waupisoo pipelines. The two arteries connect six oilsands projects to the massive Hardisty tankage hub, where the bulk of Canadian oil flows out to eastern and southern markets.
Inter Pipeline owns and operates competing Corridor and Cold Lake systems, key bitumen pipelines servicing major producers such as Shell Canada, Imperial Oil and Canadian Natural Resources.
Pembina Pipelines represents the third major operator in Alberta's oilsands, running volumes from Syncrude and Canadian Natural Resources.
Earlier this week Enbridge said it was investing approximately $550 million in its U.S./Canada Bakken oil pipeline expansion.
The company proposed the line to absorb burgeoning production from the prolific Bakken and Three Forks light oil plays, routing it from Montana to Manitoba along existing right-of-ways.
On Thursday, Enbridge launched a month-long binding open season for prospective shippers on the 45,000-barrel-per-day expansion. The call for shippers closes Oct. 29.
The series of announcements were seen favourably by analysts as positive long-term growth strategies.
"Whereas we had previously forecasted a marked slowing of Enbridge's growth beyond 2010, the flurry of recent announcements by the company continue to bolster its long-dated growth profi le," said UBS analyst Chad Friess, in a research -
"As a result, we -forecast relatively little capital surplus through 2012."
Enbridge stocks slid 35 cents to $ -per share on -Toronto Stock Exchange Thursday.
domeara@theherald.canwest.com
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