Enbridge Inc.

Enbridge Inc.

June 01, 2005 16:34 ET

Enbridge Acquires 100% Interest in Spearhead Pipeline

CALGARY, ALBERTA--(CCNMatthews - June 1, 2005) - Enbridge Inc. today announced it has completed its purchase of the outstanding shares in Spearhead Pipeline from BP Pipelines North America Inc.

Enbridge bought a 90% interest in what was then known as the Cushing-to-Chicago Pipeline System from BP Pipelines in 2003. Enbridge has now acquired BP Pipelines' remaining 10% ownership in the renamed line for a cost of US$12.4 million, bringing the total purchase price to US$124.4 million. Enbridge now owns 100% of the Spearhead Pipeline.

Enbridge intends to reverse the flow of the pipeline to transport Canadian crude oil south from the company's mainline system at Chicago to the storage and refining hub at Cushing, Oklahoma. The existing 650-mile (1050-kilometre) 22-inch and 24-inch diameter pipeline has historically operated in south-to-north service, but recently has been largely inactive. Reversing the pipeline and putting it back in service will provide Canadian crude oil producers and shippers access to markets in the Midcontinent and southern United States.

On April 29, 2005, the National Energy Board granted Enbridge regulatory approval to recover in its tolls US$10 million a year for five years on crude oil volumes related to the Spearhead project. In early March 2005, the U.S. Federal Energy Regulatory Commission approved the U.S. portion of the rate structure for committed volumes on the pipeline. Enbridge has now received all necessary approvals and will expedite work on the reversal.

Enbridge expects to have the line in service during the first quarter of 2006, with an initial capacity of 125,000 barrels per day. The line could subsequently be expanded to accommodate up to 160,000 barrels per day.

"The Spearhead Pipeline exemplifies our strategy of creating additional value for our shippers by extending the reach of our pipeline system to new markets throughout the continental United States," said Enbridge's President & Chief Executive Officer Patrick D. Daniel. "And by reversing an existing pipeline, we can create a new oil transportation option that we can bring on stream for far less than the cost of a new pipeline."

Enbridge Inc. is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,000 people, primarily in Canada, the U.S. and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the U.S. under the symbol ENB. Information about Enbridge is available on the Company's web site at http://www.enbridge.com.

Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions that are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Contact Information