ADVERTISEMENT

Investing

Enbridge Eyes Expanding Mainline Pipeline System by Late 2026

Watch BNN Bloomberg live.

(Bloomberg) -- Enbridge Inc. is discussing expanding capacity on its Mainline pipeline system by late 2026, even as the company faces competition from the newly expanded Trans Mountain system running from Alberta to the Pacific Coast.

Any expansion will be achieved through optimization of the system with an in-service date expected in late 2026 or early 2027, Colin Gruending, the company’s president of liquids pipelines, said during a call to discuss earnings results. Talks with customers on the project have begun.

The plan would mean an expansion on a conduit that is already Canada’s largest oil export pipeline system, running from Alberta to Wisconsin — one branch runs east into Michigan and back into Canada, while another runs south toward the Chicago area.

The move also comes as oil sands production in Alberta is growing to fill the extra pipeline capacity provided by Trans Mountain. Still, opinions differ on when all the extra capacity will be filled up, necessitating the expansions of conduits out of Alberta. The surplus of pipeline space means the expanded Trans Mountain won’t be full until 2028, Mark Maki, chief executive officer of the government-owned Trans Mountain Corp., told a House of Commons committee recently.

Apportionment, a form of rationing, on Enbridge’s Mainline has plummeted since the nearly 900,000 barrel a day Trans Mountain Expansion started operation in May, which is able to draw away some volumes that may have been going down the Enbridge system in the past. The Mainline is apportioned 2% in November, meaning demand to use the system exceeds capacity, after two straight months of zero apportionment. Before the start of the Trans Mountain expansion, apportionment sometimes exceeded 20% or 30%.

“I don’t expect us to be in apportionment every month going forward here, but seasonally, I think you’re going to see a lot of demand for the main line,” Gruending said. The line is on track to exceed its full-year guidance to ship 3 million barrels a day, he said.

Comments on the Mainline came after Enbridge reported third-quarter earnings per share that narrowly missed the average analyst estimate. Shares were up 0.2% in Toronto at 12:09 p.m.

©2024 Bloomberg L.P.