Enbridge snags Statoil soil sands transporation contract

Enbridge Inc (ENB) announced an agreement with Statoil Canada Ltd. for the addition of the company's Leismer oil sands project as a shipper on Enbridge's Regional Oil Sands System. This brings the number of producing oil sands projects connecting to Enbridge's regional system to six. 

The Leismer project is situated in close proximity to the Waupisoo Pipeline, one of two large diameter pipelines comprising Enbridge's Regional Oil Sands system which delivers oil sands crude to the mainline hubs at Edmonton and Hardisty. Total production from the four Statoil project leases is expected to eventually reach 220,000 barrels per day of bitumen. 

The initial contract provides for a volume of up to 30,000 barrels per day from the first phase of the Leismer project and covers a 10 year period. First oil is expected in late 2011. The Waupisoo Pipeline can initially absorb Leismer volumes within its existing capacity but will require a subsequent expansion to accommodate all commitments. Further contractual arrangements would be required to accommodate the full planned production from the Leismer project over its expected 40 plus year life. Waupisoo is expandable to an ultimate capacity of 600,000 barrels per day depending on crude slate. 

"The Statoil contract is the third major oil sands transportation services agreement Enbridge has announced in the past 12 months, reinforcing our expectations of sustainable growth in oil sands production and regional pipeline infrastructure requirements over the next decade," said Patrick D. Daniel, President and Chief Executive Officer. 

Enbridge announced on January 28, 2010 an agreement with FCCL Partnership to provide additional pipeline and terminal facilities to support expansion of the Christina Lake enhanced oil project, which is operated by Cenovus Energy, with a planned in service date late in 2011. In June 2009, Enbridge signed an agreement with Imperial Oil Resources Ventures Limited and ExxonMobil Canada Properties to provide for the transportation of blended bitumen from the Kearl project in the Athabasca Oil Sands region of northern Alberta to the Edmonton, Alberta area. Enbridge filed for regulatory approval of this pipeline, called the Woodland Pipeline, on December 7, 2009, with a planned in service date in the fall of 2012. 

"The Alberta oil sands provide a secure, reliable source of Canadian crude oil for Canadian and US markets, and Enbridge is uniquely positioned to provide transportation solutions to connect growing production from Western Canada to key Eastern Canadian and U.S. Midwest markets and beyond," said Mr. Daniel.

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