Enbridge expanding pipeline capacity
Enbridge Energy Partners’ (EEP) North Dakota system is a crude oil gathering and interstate pipeline transportation system servicing the Williston Basin in North Dakota and Montana. The North Dakota system is approximately 820 miles long. It has 23 pump stations and multiple delivery points. It has a storage capacity of approximately 1.3 million barrels. Its customers include more than a dozen third party gathering pipeline connections. North Dakota’s pipeline and rail export capacity increased from 80,000 barrels per day in 2005 to ~435,000 barrels per day in 2013.
North Dakota Classic expansion project
EEP’s Phase 5 and Phase 6 expansions increased the pipeline capacity on the North Dakota system by 145,000 barrels per day of pipeline export capacity from North Dakota. In March, 2013, the Bakken Pipeline Expansion Project was placed into service. This pipeline originates at Berthold, North Dakota and terminates at the Enbridge Mainline in Cromer, Manitoba. Starting from March, 2014, Enbridge has secured five to ten year contracts from multiple shippers for 100,000 barrels per day of the total capacity.
The Bakken Expansion Project includes the 225,000 barrels per day expansion of the North Dakota Classic system and the Beaver Lodge Loop Project (or BLLP) which provides 425,000 barrels per day of pipeline capacity into Berthold Station. The BLLP project was placed into service in March, 2013.
Bakken Access expansion program
During 2013, EEP completed the Bakken Access program that enhanced its gathering capabilities on the North Dakota system. The project also included new facilities at multiple locations accommodating seven third party pipeline connections and the construction of a new truck delivery and gathering pipeline facility. The North Dakota system now has the ability to receive more than 300,000 barrels per day from third party pipelines and more than 500,000 barrels per day from Enbridge truck and gathering facilities.
In October 2013, Enbridge Storage, in North Dakota, placed the first of two 150,000 contract storage tanks into service adjacent to its rail projects. The tanks, when completed, will have a capacity of 450,000 barrels. It has the opportunity to expand this new line of business to other locations across the Bakken region.
Higher production at the Bakken Shale of the Williston Basin is encouraging for the midstream pipeline operators. Increased transportation requirements will be positive for crude oil pipeline suppliers in the Bakken including Enbridge Energy Partners (EEP), Energy Transfer Partners (ETP), and Plains All American (PAA). These are master limited partnerships (or MLPs). They’re components of the Alerian MLP ETF (AMLP). Increased transportation capacity would also benefit oil producers like Oasis Petroleum (or OAS), Whiting Petroleum (or WLL), and Continental Resources (or CLR) through higher price realization. All of these are components of the SPDR S&P Oil & Gas Exploration & Production (XOP).