Enbridge's Sandpiper Pipeline Gains Anchor Shipper in Marathon Petroleum - Open Season

November 26, 2013 R.T. Dukes

Enbridge Partners announced it has reached an agreement with Marathon Petroleum to become an anchor shipper on the Sandpiper Pipeline.

The Sandpiper Pipeline is a 225,000 b/d oil pipeline that will run 375 miles from Beaver Lodge, North Dakota, to Clearbrook, Minnesota. The project also includes a 30-inch, 233-mile pipeline extension from Clearbrook, Minnesota, to Superior, Wisconsin.

Marathon will fund 37.5% of the pipeline and gain a 27% interest in Enbridge's North Dakota System. The project has an estimated cost of $2.6 billion and is expected in service in the first quarter of 2016.

“The Sandpiper Project provides much needed pipeline capacity to enable rapidly growing Bakken crude oil production.......” said Stephen J. Wuori, president. “We are delighted to welcome Marathon Petroleum as both a committed shipper and a partner. Their shipping commitment demonstrates the economic attractiveness of establishing a low-cost reliable pipeline solution for Bakken producers to access the premium North American markets for light crude oil.”

An open season for the pipeline starts at 12 pm MST on November 26, 2013 and ends at 5 pm on January 24, 2014.

Read the full press release at enbridgepartners.com

Enbridge Completes Bakken Pipeline Expansion & Berthold Rail Facility

August 21, 2013 R.T. Dukes

Enbridge has completed the most recent Bakken Pipeline System expansion and opened its Berthold Rail Facility.

The Bakken Pipeline Expansion included two projects that added 145,000 b/d of pipeline capacity out of the Bakken region. The Berthold Rail Facility added 80,000 b/d of capacity and Enbridge now has the capacity to move 415,000 b/d out of North Dakota. That's a little more than half of the 820,000 b/d of oil produced in North Dakota.

“The completed Bakken Pipeline Expansion and Berthold Rail Facility are now providing options that are sorely needed. Combine these finished projects with the upcoming capacity within the Sandpiper Pipeline, and Enbridge will have the ability to move 660,000 barrels per day from the Bakken by early 2015.”

Enbridge partnered with the Berthold Farmers Elevator to construct the new rail facility and the facility has been in service since the second quarter of this year.

The company is also holding open houses in North Dakota, Minnesota, and Wisconsin this week related to the path of the proposed Sandpiper Pipeline Project. The pipeline will add 225,000 b/d of capacity out of the basin and has an expected in service of late 2014 or early 2015.

Bakken Producing Sour Gas? H2S Problem In North Dakota

May 30, 2013 R.T. Dukes

Is the Bakken producing higher volumes of H2S? That's the question you have to ask yourself when you see pipelines implementing H2S standards for the first time. On May 8, Enbridge submitted an emergency application to the Federal Energy Regulation Commission (FERC) asking to amend its conditions of carriage to 5 ppm of H2S or less. If accepted, Enbridge would have the right to reject crude with higher levels of H2S.

H2S limits that have been implemented this year include:

Tesoro's High Plains Pipeline - 5 ppm since January 1
Bridger & Bella Fourche Pipelines - 10 ppm since April 1

When those limits went into place, it seems as if producers with high H2S concentrations might have shifted production to the Enbridge system.

Enbridge acted after it found concentrations of 1,200 ppm in a crude tank at its Berthold Terminal. 20 ppm is the limit allowed by OHSA and an average of 10 ppm of exposure is all that is allowed over an 8-hour work day.

Both Plains Marketing and Murex Petroleum objected to the FERC application, but it looks as if they solved their differences when Enbridge notified FERC it wasn't planning an outright ban on crude with higher H2S concentrations. The two companies weren't against the change, but were afraid they couldn't comply in the time frame planned.

You can read more about the topic in an article at reuters.com