Flanagan South Pipeline To Be In Service In Early December, Says Enbridge BY ELSIE ROSS – NOV. 5, 2014 – VIEW ISSUE Enbridge Inc. is in the process of line filling its Flanagan South pipeline and heavy Canadian production should be landing in Jones Creek, Texas, in early December as the company waits for approval to start up the Line 9 reversal and expansion in Canada, the company’s chief executive officer said today. “This is a big milestone for Enbridge and its customers because it (Flanagan South) connects Canadian heavy barrels with scale to the largest refining centre in the world,” Al Monaco said in a conference call to discuss third quarter 2014 results. “We have already seen the benefits of this conduit with improved netbacks for Canadian producers.” Flanagan South, along with the Seaway Crude Pipeline System twinning that was mechanically completed in July 2014, provides 585,000 bbls per day of incremental capacity for Canadian and Bakken crude from Flanagan, Ill., to the Gulf Coast. Volumes on the Seaway system will have access to four million bbls per day in the refinery market it goes into as well as to the ECHO terminal downstream at Jones Creek, where they can be shipped to one of nine refiners in the Houston/Texas City area or to one of four refiners at Port Arthur, he said. The facilities at Freeport and Houston provide access to tidewater as well. The National Energy Board continues to review a submission it had requested from Enbridge about isolation valves on the Line 9 reversal that will provide Quebec refiners with access to 300,000 bbls per day of light oil from Western Canada, said Monaco. Enbridge worked very hard to satisfy the conditions the NEB said must be met before the project could start up and has completed the fieldwork, he said. However, “the NEB told us, in what I would say some pretty blunt terms, that we needed to provide more information on one of those conditions, which has to do with the placement of isolation valves,” said Monaco (DOB, Oct. 10, 2014). Since receiving the board’s directive, Enbridge has taken a hard look at what it had done technically and how it had addressed the condition from the NEB, said Monaco. “It’s clear from a second look that we should have done a much better job of explaining our approach to the placement of valves along the route and the NEB, I think, was right to question us on it.” Until the board completes its review, Enbridge is unable to say when it will be able to put the line into service. Although the NEB has to respond by mid-January, he said he hopes it will be sooner than that. Enbridge in its view has taken a “very rigorous approach and a conservative one to the entire project,” said Monaco. “Although we believe we have not only met but exceeded the requirements, it’s up to the NEB to assess whether we have met that mark and we respect the process they have to go through to make that assessment,” he said. “That’s been the strength of the regulatory process in Canada for decades and it’s what the public relies on to ensure the industry is held to the highest standards.” From the beginning of the project, Enbridge “has done everything practical” to minimize the risk, especially with respect to water crossings and other high consequence areas, according to Monaco. “That’s why we ourselves committed to adding 17 new remote isolation valves to bring the total to 62 along the route — that’s a 40 per cent increase in the remote control valves.” That’s also why Enbridge reviewed every single one of the 329 water crossings along Line 9, not only those in high consequence areas, he said. The isolation valves are just one of the several layers of protection to which the company has committed, according to Monaco. The others include integrity management in an extensive dig program, ongoing monitoring of the line, leak detection and enhanced emergency response commitments beyond what is required. “We have gone beyond what is required in those areas because that’s how we are measuring ourselves in this environment and we know that’s what the public expects of us.” Quarterly results Enbridge reported a loss attributable to common shareholders $80 million (10 cents per diluted share) for the three months ended Sept. 30, 2014, compared with $421 million (51 cents per share) for the comparable 2013 period, due mainly to changes in unrealized derivative fair value gains and losses. Earnings attributable to common shareholders for the nine months were $1.07 billion ($1.27 per share), up from $713 million (88 cents per share) in the 2013 period. Enbridge’s 2014 third quarter adjusted earnings were $345 million (41 cents per share), up from $278 million (34 cents per share), while nine-month adjusted earnings increased to $1.17 billion ($1.41 per share) from $1.07 billion ($1.33 per share). The company attributed the third quarter adjusted earnings growth mainly to strong operating performance and the continued successful execution of its growth capital program as demonstrated by new assets placed into service. This trend was particularly evident in Liquids Pipelines and Sponsored Investments, it said. In Liquids Pipelines, the Canadian Mainline continued its strong 2014 performance bolstered by higher throughput from growing crude oil supply in Western Canada and higher downstream refinery demand, as well as successful efforts by the company to optimize capacity and throughput and to enhance scheduling efficiency with shippers. Canadian Mainline deliveries were up 17.5 per cent in the third quarter to a record 2.039 million bbls per day from 1.736 million bbls a day in 2013, while the nine-month average rose to 1.970 million bbls per day from 1.707 million bbls a day in the previous period. The Canadian Mainline includes deliveries ex-Gretna, Man., which includes United States and eastern Canadian deliveries originating from Western Canada. Regional Oil Sands System volumes increased to an average of 690,000 bbls per day in the third quarter from 578,000 bbls a day in 2013, with volumes for the nine months rising to 697,000 bbls per day from 490,000 bbls a day. The Norealis pipeline, which was placed into service in April 2014, and higher throughput on the Athabasca Mainline, continued to be two key contributors of growth, said Enbridge. Also in the third quarter, the company advanced a key phase of its $3.2-billion Eastern Access program, with the completion of the Line 6B replacement and expansion project in September 2014. The project included replacing approximately 338 kilometres of existing pipeline in Indiana and Michigan and increased capacity in this section of the system to 500,000 bbls per day. ARTICLE SECTION: PIPELINES ARTICLE CATEGORY: FINANCIAL RESULTS
Posted on: Thu, 25 Dec 2014 16:18:17 +0000
Trending Topics
Recently Viewed Topics
© 2015