Friday, March 5, 2010

Enbridge says new oil pipelines may run below capacity until 2017

NEW YORK - Enbridge Energy Partners LP, the Houston-based pipeline partnership controlled by Canada’s largest pipeline company, said it may take seven years to fill new crude oil pipelines from Canada to the U.S. because of excess capacity.
“It may be 2017 before we see all the pipes that are being planned to be full,” said Stephen Letwin, managing director of Enbridge Energy Co., the general partner of Enbridge Energy Partners, during an interview at Bloomberg headquarters in New York. “The fact that these pipes are not filling until 2017 is not critical because we know we are going to get our value back.”
Although the new Enbridge Alberta Clipper will operate as a common carrier line, Enbridge has throughput guarantees from several large producers in Canada’s oil sands. Because of the throughput agreements, Enbridge will collect about $180 million a year from its shippers regardless of the volume shipped. If the pipeline runs at reduced rates, shippers will pay a higher price per barrel - a fact that is leading the oilsands shippers who have signed throughput agreements to seek relief from the U.S. Federal Energy Regulatory Commission.
It will take about 6.4 million barrels of linefill to fill the Clipper and that will “likely be later in the year or even next year,” Mark Maki, the company’s chief financial officer, said.

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