Enbridge is expanding its Wisconsin-to-Illinois Southern Access crude oil pipeline from 300,000 b/d to 1.2 million b/d, but waiting until late in 2021 to bring the extra capacity online to coincide with the completion of the larger Line 3 pipeline replacement project.
The roughly $500 million expansion of the pipeline runs about 500 miles from Superior, Wisconsin to Flanagan, Illinois, and is part of Enbridge's larger Mainline network to move Canadian crude to refining hubs in the Midwest and the US Gulf Coast.
The Southern Access expansion work was recently completed, said Enbridge spokesman Michael Barnes Dec. 11, but the plan is to keep the extra capacity offline until more crude oil is flowing through Line 3 from Canada to Superior.
Construction on the US side of Line 3 in Minnesota began in early December and is now expected to be completed early in the fourth quarter. The $6.75 billion Line 3 replacement would increase crude pipeline capacity from 370,000 b/d now to 760,000 b/d as it moves Canadian crude from Alberta to Superior.
From Illinois, the Southern Access Pipeline connects to Enbridge's Flanagan South line that moves crude to the oil storage hub in Cushing, Oklahoma, and the Seaway Pipeline system runs from Cushing to the Texas Gulf Coast.
There's also the 300,000 b/d Southern Access Extension pipeline that stretches from Flanagan to Pakota, Illinois, which will have access to the Capline system once that pipeline is reversed to move crude oil from Pakota to the Louisiana Gulf Coast.
Through optimization efforts, Enbridge eventually plans to add 100,000 b/d of extra capacity to the Southern Access Extension, 250,000 b/d to Flanagan South and another 200,000 b/d to the Seaway system.
Enbridge Liquids Pipelines President Vern Yu detailed some of the plans during Enbridge's recent investor day on Dec. 8.
"After we complete Line 3 and the full expansion of Southern Access to 1.2 million barrels a day, our system is going to be balanced," Yu said. "We're going to have enough capacity to feed all of our core refineries in the US Midwest and match our existing market access pipeline commitments. After that, we see increased US Gulf Coast refinery demand and emerging market demand for North American crude and this is going to provide us more opportunity to expand our footprint along the Gulf Coast."
Crude exports
The plan is for Enbridge to help USGC refineries rely more on Canadian crude rather than heavy barrels from Latin America and the Middle East. Enbridge also wants to export more Canadian crude from the USGC and its Houston oil terminal, with Yu arguing that USGC crude exports should grow to 6 million b/d by 2040.
Enbridge also has a joint venture with Enterprise Products Partners to build the Sea Port Oil Terminal, called SPOT, offshore of the Houston Ship Channel to better accommodate VLCCs in deeper waters without reverse lightering. The SPOT project is on hold pending the coronavirus pandemic and federal permitting, so it's still a few years away.
"We believe that this is a deeply advantaged export facility," Yu said of SPOT. "First, it has access to all of North America's different supply basins. It's able to load VLCCs without having to lighter, and it's away from the congestion along the Houston Ship Channel. Going with this, we see good opportunities for Seaway in the future."
