Enbridge to build $475MM terminal, pipeline for Husky's Sunrise Oil Sands Project

Source: Enbridge

Enbridge Inc. (TSX:ENB) (NYSE:ENB) has entered into an agreement to provide pipeline and terminaling services to the proposed, Husky-operated (TSX:HSE) Sunrise Oil Sands Project

Enbridge will construct a new originating terminal, coined the Hartley terminal, at the Sunrise Project; a 112-kilometer (66-mile), 24-inch diameter pipeline from Hartley to Enbridge's Cheecham Terminal; and additional tankage at Cheecham. The estimated cost of the project is approximately $475 million with an initial capacity of 90,000 bpd, expandable to 270,000 bpd. The facilities are expected to be in service in the latter half of 2013. 

"We are very pleased to add the Sunrise Project to our roster of oil sands projects committed to Enbridge's regional pipeline and terminal system. This will bring the number of oil sands projects connected to our system to eight by 2013," said Patrick D. Daniel, President and Chief Executive Officer, Enbridge Inc. "The Sunrise commercial arrangements are similar to those recently concluded with both Suncor and the Christina Lake project in that Enbridge will benefit from an attractive investment in new facilities and from increased volumes on existing facilities. The investment will be accretive to earnings per share in 2013." 

Mr. Daniel added, "This new project brings expansions and extensions of Enbridge's Regional Oil Sands System announced in the last year to a total of approximately $2.3 billion. This string of investments reflects our strategy to capitalize on regional pipeline and terminaling opportunities and further solidifies our competitive position as the largest pipeline operator in this oilsands region." 

Under the terms of the agreement, Enbridge will also provide pipeline transportation services on its existing Regional Oil Sands System for up to 90,000 barrels per day of diluted bitumen produced from Phase 1 of the Sunrise Project. All of these arrangements remain subject to the final sanctioning of the Sunrise Project. The initial term of the pipeline and terminaling agreement is 20 years with Husky having the right to extend the agreement in successive five year terms for a total contract life of 45 years. Enbridge and Husky will share equally in net revenues from third party volumes transported in the line.

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