Enbridge adding Mainline FSP capacity for U.S. refiners

Executive Summary

• Enbridge Inc. has reached a final investment decision on the Mainline Optimization Phase 1 (MLO1) project, aimed at enhancing North American energy security by increasing the delivery of Canadian heavy oil to U.S. refining markets.
• The project involves significant capacity additions to the Mainline network and the Flanagan South Pipeline (FSP), with total expected capital costs of $1.4 billion USD.
• New capacity is scheduled to become available in 2027, supported by long-term take-or-pay contracts that secure full-path service from Edmonton, Alberta, to Houston, Texas.

Key Details

• Project Name: Mainline Optimization Phase 1 (MLO1).
• Capital Cost: Expected aggregate capital cost of $1.4 billion (U.S.).
• Capacity Additions:
  • Adds 150,000 barrels per day (bpd) to the Mainline system.
  • Adds 100,000 bpd to the Flanagan South Pipeline (FSP).
• Target Markets: Increases deliveries of Canadian heavy oil to key U.S. refining markets in the Midwest (PADD II) and Gulf Coast (PADD III).
• Timeline: Capacity is anticipated to be available in 2027.
• Implementation Strategy:
  • Mainline capacity increase achieved through upstream optimizations and terminal enhancements.
  • FSP expansion includes the addition of pump stations and terminal enhancements.
  • Utilization of existing capacity on the Seaway Pipeline.
• Commercial Terms:
  • FSP expansion is underpinned by long-term take-or-pay contracts for full-path service from Edmonton, Alta., to Houston, Tex.
  • Majority of existing FSP customers elected to extend their existing full-path contracts through the next decade during an open season process earlier this year.
• Strategic Rationale: The project leverages existing networks to meet growing customer demand, supporting long-term energy security and affordability across North America.

Notable Quotes

• "MLO1 is expected to add capital-efficient and timely egress capacity from Canada, supporting Canadian production and increasing connectivity to the best refining markets in North America. This project demonstrates the competitive advantage of leveraging existing networks to meet growing customer demand, supporting long-term energy security and affordability across North America." — Colin Gruending, Executive Vice-President and President of Liquids Pipelines, Enbridge Inc.