Enbridge selects Marathon as anchor shipper for pipeline project

Canadian pipeline company Enbridge has selected Marathon Petroleum as an anchor shipper for the $2.6bn Sandpiper pipeline project.

A component of Enbridge’s overall $6.2bn light oil market access (LOMA) programme, the project will be integrated with the partnership’s North Dakota system.

The Sandpiper project will expand and extend the North Dakota feeder system of the partnership. Marathon will fund 37.5% of the project in exchange for around 27% equity interest in the North Dakota system.

The project will expand the Bakken takeaway capacity of the North Dakota system by 225,000 barrels per day (bpd) to a total of 580,000bpd with a target in-service date of early 2016.

As part of the expansion, a 24in diameter line will be constructed from Beaver Lodge, North Dakota, to Clearbrook, Minnesota. A 30in diameter line will also be built from Clearbrook to the mainline system terminal in Superior, Wisconsin.

The project will use the same corridor as the partnership’s existing pipelines for most of its path from Berthold to Superior and will also cut down on environmental impacts.

The commercial framework of the project is consistent with the partnership’s objective of securing low-risk commercial structures that deliver better earnings and cash flows to its unit holders.

Enbridge Liquids pipelines and major projects president Stephen Wuori said that Marathon’s shipping commitment demonstrates the economic attractiveness of establishing a low-cost reliable pipeline solution for Bakken producers to access North American markets for light crude oil.

"The Sandpiper Project provides much needed pipeline capacity to enable rapidly growing Bakken crude oil production, in conjunction with the Partnership’s Lakehead mainline system and the other components of the overall LOMA programme, to access premium markets in Eastern Canada and the US Midwest," he added.