By CAROLYN KING
Enbridge said Monday that it and privately held Canopy Prospecting will develop a unit-train facility and local pipeline infrastructure in Pennsylvania to deliver Bakken and other light sweet crude oil to refineries in the Philadelphia area.
The Canadian pipeline company said it will own 75% of the joint venture - to be called Eddystone Rail Co. - and act as operator.
The $68 million project is expected to handle 80,000 bpd when it comes into service in the third quarter of 2013, and can ultimately be expanded to receive up to twice that amount of oil for subsequent transport by barge or pipeline to nearby refineries as early as mid-2014, it said.
Enbridge has a number of projects under development to take advantage of growing North American oil and gas production. Last last week, it announced plans to proceed with a 1.8 billion Canadian dollar ($1.81 billion) expansion of its mainline system in the oil-rich western Canadian province of Alberta.
The joint venture with Canopy will be the largest unit-train facility able to receive crudes from North Dakota, where production is booming, directly into Philadelphia-area refineries, the partners said.
Enbridge noted that, by early next year, its Bakken Expansion Program will add 200,000 bpd of increased export pipeline capacity from the Bakken resource play - 80,000 bpd into Berthold, N.D. and 120,000 bpd into Cromer, Manitoba - taking Enbridge's total capacity from North Dakota to 475,000 bpd.
"Rail is the fastest way to provide increased export capacity out of the Bakken, creating a near-term solution to transportation bottlenecks and the resulting crude oil pricing differentials," said Stephen J. Wuori, president of Enbridge's liquids pipelines unit, in the statement.
Enbridge will seek environmental, local and regulatory approvals to facilitate in-service for the Eddystone project in the third quarter of 2013. Its partner, Canopy, is a Pennsylvania-based company focused on niche petroleum midstream and process investments.
Dow Jones Newswires