Enbridge Inc. (TSX:ENB) (NYSE:ENB) today announced a binding open season ("Open Season") to solicit commitments from shippers for capacity on the proposed Southern Access Extension pipeline, to be constructed, owned, and operated by U.S. subsidiary Enbridge Pipelines (Illinois) L.L.C. (the "Carrier"). The new pipeline will transport crude oil from Pontiac, Illinois, at Enbridge's Flanagan Terminal, where it will receive crude oil from Enbridge Energy Partners, L.P.'s ("the Partnership") Lakehead System, to Patoka, Illinois.
The 165-mile (265-kilometer), 24-inch diameter pipeline will be constructed as a stand-alone project with an anticipated in service date of early 2015. The diameter of the pipeline could be increased, depending on the results of the Open Season. Committed shippers will be asked to commit to capacity only on the Southern Access Extension proposed pipeline and will not be required to make long-term commitments to ship on the Partnership's Lakehead System.
Enbridge has received sufficient capacity commitments from an anchor shipper to support the 24-inch pipeline as proposed. This Open Season provides an opportunity for additional shippers to support the Southern Access Extension by making volume commitments for the required term.
Shippers will have the option of selecting a ten or fifteen-year term as well as one of three available commencement dates for service. Subject to regulatory approval by the Federal Energy Regulatory Commission (FERC), committed volumes will not be subject to pro-rationing to accommodate uncommitted volumes under ordinary operating conditions. The Carrier will share in construction cost overruns with committed shippers, which will provide an incentive to the Carrier to minimize capital costs, thereby lowering the tariff rates.
Open Season Process
The binding open commitment period will begin at 3 p.m. MT on December 12, 2012, and will end at 3 p.m. MT on January 18, 2013.
Bona fide potential shippers that wish to receive access to the Open Season documents, including the Transportation Services Agreement, are required to execute a Confidentiality Agreement. No edits or amendments to the Confidentiality Agreement will be accepted.
More information about the Southern Access Extension project and the binding open season is available at http://southernaccessextension.enbridgeus.com