Enbridge Inc (TSX: ENB) has reached a final investment decision on their Mainline Optimization Phase 1 project, with the company committing to spend US$1.4 billion on the effort.
The project will add further capacity to Enbridge’s Mainline network alongside the Flanagan South pipeline, which will in turn increase deliveries of Canadian heavy oil to the US Midwest and Gulf Coast. A further 150,000 bpd of capacity is set to be added to the Mainline system, while 100,000 bpd of capacity is set to be added to Flanagan South, with that additional capacity expected to come online in 2027.
The additional capacity is expected to come as a result of upstream optimizations and terminal enhancements, while Flanagan South is also expected to see further pump stations added to the line.
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The expansion of Flanagan South is said to be supported by long term take or pay contracts for service from Edmonton to Houston, supporting returns that are attractive for the optimization project as a whole.
“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,” commented Colin Gruending, EVP of Enbridge.
Enrbidge last traded at $67.76 on the TSX.
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