Citing its plans for expanding its reach from Canada and the Bakken to the U.S. East Coast, Enbridge Inc. reaffirmed its intention to use pipeline-to-rail strategies for expanding to the Philadelphia and other mid-Atlantic eastern markets during a conference call to unveil its latest financial and capital expansion plans to analysts and the news media.

“The East Coast is a case in point” for rail transport having its advantages at certain times and places, said CEO Al Monaco in outlining Enbridge’s Eddystone Rail Terminal project. “It is an entire logistical solution that we’re developing to serve East Coast refinery demand,” Monaco said.

Monaco said Enbridge intends to obtain shipper commitments of at least 80,000 b/d (via rail), offloading at the terminal, and from there several refineries can be supplied by local pipeline or barge, including refineries on Canada’s East Coast.

“We anticipate that most of this volume will originate from our rail-loading facility in Berthold, North Dakota, which we have explained before, but we are also looking at other pipe-to-rail sites on our pipeline system.”

The developing Eddystone rail facility can be doubled in capacity to 160,000 b/d, Monaco said. Even that total, however, will not be sufficient to meet all the eastern refinery demand, he said.

“So, this is only one facet of the broader East Coast market access program that we are developing,” Monaco said.

In response to an analyst’s question on how big the rail sector business might become from a capital standpoint, CFO J. Richard Bird said the capital allocation is “probably not large.” Bird said the important aspect is that “rail is complementary to us in that it can effectively extend the mainline and other lines to markets that we can’t reach yet with our pipelines.

“I think that is the main strategic value and that it pulls through volumes on the mainline.” Capital amounts for rail are counted in the tens or low hundreds of millions, he said.

Is it a stopgap measure for the time being? “Yes, it is a stopgap measure because based on where the prices are regional, or the basis between key points, at that point there is a yearning to get rail involved in moving volumes to markets that can’t be met right away,” Bird said. “Pipelining is going to be tough to get to Philly, for example, so I think it is a very good stopgap there for the interim.”

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