Enbridge Pipelines Inc – a subsidiary of pipeline operator Enbridge Inc. (ENB - Free Report) – entered into an agreement with shippers for building a 179 kilometer pipeline expansion project in Canada. The estimated cost of construction is C$1.8 billion.
The expansion project includes a 36-inch line with tankage and terminal facilities at Edmonton and Hardisty. The new line will have an initial capacity of 570,000 barrels per day (bpd), which can be expanded up to 800,000 bpd.
An additional surcharge of 25 cents will be levied on all shipments from Edmonton to Hardisty. The new line and facilities will thereafter be incorporated into the Enbridge Pipelines’ Mainline Competitive Toll Settlement (CTS) agreement. An adjustment for receipt of tankage fees also forms part of the deal, if the new facility fails to achieve its target.
Subject to some regulatory approvals, it is expected that Enbridge will commence construction work in the first quarter of 2014.
Enbridge currently retains a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months.
The parent company of Enbridge Energy Partners L.P. (EEP - Free Report) , Enbridge Inc. is a leader in delivering energy. It operates in Canada and the U.S. and has the world's longest crude oil and liquids transportation system. Enbridge is involved in natural gas gathering, transmission and midstream businesses and is also engaged in power transmission. The company provides distribution services in Ontario, Quebec, New Brunswick and New York State. As a generator of energy, the company is expanding its interests in wind and solar energy, geothermal and hybrid fuel cells.