TSX : ENB
NYSE : ENB
March 02, 2006 07:30 ET
Enbridge's Spearhead Pipeline Delivers Canadian Crude Oil to Cushing, Oklahoma
CALGARY, ALBERTA AND CUSHING, OKLAHOMA--(CCNMatthews - March 2, 2006) - Enbridge Inc. (TSX:ENB) (NYSE: ENB) announced today that the first Western Canadian crude oil will officially be delivered through its Spearhead Pipeline to Cushing, Oklahoma this morning. This event marks the inauguration of an economic path for substantial volumes of Canadian crude oil to penetrate the most significant trading hub in the United States.
A number of Enbridge Inc. senior executives, customers and other dignitaries will celebrate the "first oil" of Spearhead at a special inaugural valve-turning ceremony today at the Cushing crude oil terminal.
The crude oil being delivered to Cushing originates in the Canadian oil sands located in northern Alberta. The oil sands contain 175 billion barrels of reserves, second only to Saudi Arabia. The oil enters the Enbridge mainline system at Edmonton, Alberta, and travels 1,565 miles (2519 kilometres) to Chicago, before entering the Spearhead Pipeline for the final 650-mile (1046-kilometre) lap to Cushing. The transit time from Edmonton to Cushing averages approximately 47 days.
"This event marks the beginning of a new era of North American crude supply," said Patrick D. Daniel, Enbridge president and chief executive officer. "Canada is already the largest supplier of crude oil to U.S. markets at 1.6 million barrels per day. Canadian exports have the potential to double during the next 10 years if attractive markets for the production can be established."
"The Spearhead Pipeline is one component of Enbridge's broader plan to provide access for Canadian production to new markets in the United States," added Mr. Daniel. "This will enable more U.S. refineries to receive reliable supplies of Canadian crude oil while providing Canadian producers with the favorable netbacks required to make this crude oil economic to produce. For example, in recent weeks, the price of heavy crude oil in Cushing ran at about $10 higher per barrel than Canadian heavy crude sells for in Chicago. The spot toll to move a barrel from Chicago to Cushing on Spearhead is only $1.50. As a result, we anticipate that throughput will rapidly reach the 125,000 barrels per day initial capacity on the line."
"We also have received strong interest in expanding the line, which we can do very economically," continued Mr. Daniel. "We will respond with all the capacity that shippers require through a combination of a near-term power-up to 190,000 barrels per day and a longer term looping program, the first phase of which would provide a further 100,000 barrels per day."
The Spearhead Pipeline is the 'spearhead' of Enbridge's market access initiatives. Other components of Enbridge's plan include the Southern Access and Alberta Clipper mainline expansion projects - and the Southern Access extension. The combination of these pipeline projects will provide the lowest toll and greatest delivery and storage flexibility for shippers and will enable substantial additional volumes of oil sands production to supply U.S. refineries in Chicago and beyond - and as far south as the U.S. Gulf Coast.
Note: A high resolution map of the Spearhead Pipeline is available on Enbridge's web site at www.enbridge.com
Enbridge Inc., a Canadian company, 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 to 1.8 million customers in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,500 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 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.