OTTAWA -- Enbridge Inc. has shelved plans for a $346-million pipeline expansion that would have shipped western Canadian crude through Ontario and Quebec to markets in the United States.
The company said yesterday that the project, dubbed Trailbreaker, did not have the required support among oil companies, which would have had to commit firm volumes to the pipeline.
"Given the current economic climate, we're putting the project on hold," Enbridge spokeswoman Jennifer Varey said from Calgary, where the company is based.
The Canadian Association of Petroleum Producers, the industry lobby group, had declined to support the pipeline expansion because it did not offer attractive returns for western producers.
The company planned to ship 150,000 barrels a day of diluted oil sand bitumen sent by pipeline through Sarnia, Ont., to Portland, Me., then by tanker to the Gulf Coast. The project would have required Enbridge to reverse the flow of a pipeline that now moves imported crude from Montreal to refineries in Sarnia.
As oil sands producers have delayed expansion plans, Enbridge and other pipeline companies have scaled back pipeline projects that would carry oil sands bitumen and synthetic crude to the U.S. Gulf Coast.
The Trailbreaker route, which was to have been operating in 2010, was seen as a temporary export route that would be superseded by new pipelines from Alberta to the Gulf Coast.
In late August, Enbridge did a deal with BP PLC for a scaled-back plan to carry oil sands crude to the coast.
Earlier in the summer, Enbridge had shelved a bigger proposal because, it said, there would not be enough oil sands production to justify the 400,000 barrel-a-day line before 2014. But the company then said it would partner with BP to spend between $1-billion and $2-billion to expand existing pipelines and build new connections to move up to 250,000 barrels a day to refiners on the Gulf Coast by 2012.
The Gulf Coast region is the biggest crude processing centre in North America. Its refineries are configured to process heavy oil, which is an opportunity for Alberta companies, particularly given a decline in production of Venezuelan and Mexican heavy oil.
ENBRIDGE (ENB)
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