Enbridge to start moving crude in new pipeline

Enbridge Line 3 Image: Enbridge

Enbridge Inc. is getting ready to ship crude from the oilsands in the first new cross-border oil-sands conduit built between Canada and the U.S. in years.

The company is offering 620,000 barrels a day of capacity in its Line 3 oil pipeline in October, according to a notice it sent to shippers.  The Line 3 project will replace and older Line 3 that can ship about 390,000 barrels a day. The project is scheduled to go into operation in the fourth quarter, according to an email from Enbridge.

“The capacity provided to shippers is still an estimate as there are numerous factors including linefill, system outages for construction and tie in work that need to be completed,” Jesse Semko, Enbridge spokesman, said in the email.

The start of Line 3 is expected to bring relief to Canada’s oilsands producers, who have struggled for years with a shortage of export pipelines as projects face increasing scrutiny from courts and regulators. U.S. President Joe Biden, on his first day in office, rescinded a permit for TC Energy Corp.’s Keystone XL project that would have helped increase shipments of Canadian crude to the U.S. Gulf Coast.

The expected start of the pipeline comes after Enbridge spent years fighting regulatory and court battles to build the 760,000-barrel-a-day pipeline, which replaces the older conduit between Alberta and Wisconsin. The project has been fiercely opposed by some environmental and indigenous groups, who have staged protests this summer along the construction route. 

Heavy Western Canadian Select crude’s discount to the West Texas Intermediate benchmark for Oct. narrowed 40 cents to $12.05 a barrel at 10:23 a.m. Calgary time and, for September, narrowed 35 cents to $13.40/bbl, according to NE2 Group data.

Enbridge will offer 350,000 barrels a day of light oil capacity and 270,000 barrels a day of heavy oil capacity in October, according to a copy of the shipper notice seen by Bloomberg.

© 2021 Bloomberg L.P.

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