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Enbridge Secures Marathon as Anchor Shipper For Sandpiper

Enbridge Energy Partners LP (EEP) and its parent, Calgary-based Enbridge Inc., have secured Marathon Petroleum Corp. (MPC) as an anchor shipper for the $2.6 billion Sandpiper Pipeline, which will transport light crude oil from the Bakken Shale and Western Canada by 2016.

Houston-based EEP said MPC will fund 37.5% of the Sandpiper project in exchange for an approximate 27% stake in EEP's North Dakota feeder system, part of Enbridge's overall plan to invest $6.2 million over four years to expand several pipelines in the region (see Daily GPI,Dec. 10, 2012).

The Sandpiper project will expand the takeaway capacity of EEP's North Dakota system by 225,000 b/d, to a total of 580,000 b/d. The expansion involves construction of a 24-inch diameter pipeline from Beaver Lodge, ND, to Clearbrook, MN, and a 30-inch diameter pipeline from Clearbrook to a mainline system terminal in Superior, WI.

The pipeline will serve as a twin to the existing 210,000 b/d North Dakota System mainline, which now terminates at Clearbook. The twin will add an additional 225,000 b/d of capacity between Beaver Lodge and Clearbrook, and 375,000 b/d of capacity between Clearbrook and Superior.

According to EEP's 3Q2013 earnings presentation from Oct. 30, Sandpiper is scheduled to be in service during the first half of 2016.

"We are delighted to welcome MPC as both a committed shipper and a partner," said Stephen J. Wuori, president of Enbridge liquids pipelines and major projects. "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."

Collectively, several Enbridge projects will bring an additional 400,000 b/d of light crude oil takeaway capacity from the Bakken and Western Canada to markets in the Midwest and Eastern Canada.

EEP said Monday it will hold an open season for the Sandpiper project and will give all shippers "an equal opportunity to enter into capacity commitments on the project.

"An appropriate amount of capacity will be reserved for uncommitted shippers, at tolls which will be integrated with the North Dakota System. Sandpiper capacity will be expanded if necessary to maintain this reserve.”

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