Enbridge Energy Partners, L.P. (NYSE:EEP) (EEP) and Enbridge Income Fund Holdings Inc. (TSX:ENF) (EIFH) have finalized capacity commitments with additional shippers to the Bakken Expansion Program under the terms of the open season process. The expansion program is being undertaken on the Enbridge North Dakota System owned by EEP, and the Enbridge Saskatchewan System, owned by the Enbridge Income Fund (EIF). The total cost of the program is expected to be $560 million.
The added capacity from this expansion will be 145,000 bpd, of which 25,000 bpd will be available by early 2011 following completion of the Portal Reversal Expansion Project, and the remaining 120,000 bpd by late 2012. Under the applicable regulatory arrangements a maximum of 115,000 bpd can be held by committed shippers and at least 30,000 bpd must be reserved for uncommitted volumes.
Anchor shippers had, by August 24, 2010, made sufficient capacity commitments to enable the expansion to proceed, which was announced on that date. An open season was commenced on August 26, 2010 to permit other shippers to subscribe for committed capacity on the same terms as the anchor shippers. Additional shippers have now executed capacity commitments under terms of the open season, the majority of which are for a term of 10 years. The combined commitments of anchor shippers and the additional shippers aggregate 100,000 bpd, leaving 15,000 bpd available for additional uncommitted volumes or subsequent committed capacity offerings.
"The Bakken and Three Forks formations represent an area of tremendous opportunity for both Enbridge Energy Partners and Enbridge Income Fund," said Stephen J. Wuori, President, Liquids Pipelines, Enbridge Inc. "Based on current activity and growth plans we anticipate that additional pipeline capacity beyond this initial Bakken Expansion Program will soon be required by producers. The ultimate expansion capacity of this program is up to 325,000 bpd with modifications and additional facilities. We will continue to work with shippers to ensure additional capacity is made available when they require it."
Enbridge's Bakken Expansion Program will involve U.S. projects which will be undertaken by EEP at a cost of approximately US$370 million; and Canadian projects which will be undertaken by EIF at a cost of approximately Cdn $190 million. The expansion program will originate at Beaver Lodge, North Dakota, in the heart of the Bakken, and will follow existing EEP and EIF rights of way to terminate at and deliver to the Enbridge mainline terminal at Cromer, Manitoba. Once on the Enbridge mainline, Bakken production will have access to the multiple markets accessible from the mainline and connected pipeline systems.