Enbridge plans reversal of oil pipeline to supply central Canada
Enbridge is planning to reverse the flow of a key oil pipeline to boost the supply of Western Canadian oil to markets in Ontario and Quebec.
Line 9 currently flows from Montreal to Sarnia, Ont., and is now mainly used to deliver oil from the Middle East and elsewhere.
Enbridge already has an application before the National Energy Board (NEB) to reverse the flow of the segment between Sarnia and Westover (near Hamilton, Ont.) so oil could flow from west to east. Now, it says it has enough support to extend that reversal and send oil all the way to Montreal.
The $100-million proposal actually represents a re-reversal. Enbridge's Line 9 was originally built in the 1970s to supply markets in eastern Canada with crude from Western Canada. The line's flow was reversed in the 1990s when imported oil became cheaper. Now, with Western Canadian crude oil about $23 a barrel cheaper than foreign supplies, there has been growing pressure to reverse the flow again.
Since refineries in Ontario and Quebec currently rely on imported crude, Enbridge says that puts Canadian refineries at a competitive disadvantage.
"The reversal of Line 9B [the part between Westover and Montreal] is being undertaken to meet Ontario and Quebec market needs for crude oil supply, increasing the supply of lower-priced Canadian oil to Canadian refineries while ensuring the Canadian energy sector remains viable," Enbridge said in a release.
Will carry light crude
Enbridge said Line 9B would carry mainly light crude oil from a variety of locations in Alberta, Saskatchewan and Manitoba. But it said the pipeline can transport heavy crude as well.
The pipeline giant says its Line 9 reversal proposal is entirely Canadian in scope. It says it has no plans to move Western Canadian crude to the U.S. east coast for transportation to the Gulf Coast.
Enbridge said it anticipates filing an application with the NEB in late fall covering the reversal of the remainder of its Line 9 from Westover to Montreal.
"Our view is that projects such as the proposed reversal of Enbridge's Lines 9A and 9B are critical to the security of energy supply in Canada and that increasing the supply of lower-priced Canadian oil to Canadian refineries benefits the refining industry and the national economy," the pipeline company said.
In separate releases, Enbridge said it plans to spend $400 million to bring more oil from oilfields in North Dakota to Flanagan, Ill., and $200 million to bring crude from Alberta to the Canada-U.S. border. Both of those projects wouldn't require Enbridge to build new pipe, but would use additional pumping horsepower to boost capacity.
With files from The Canadian Press