The Line 3 replacement program will complement the existing Line 3 segment replacement program and include all remaining segments of Line 3 between Hardisty, Alta. and Superior, the two companies announced Monday.
The L3R program, subject to regulatory approvals, is targeted to be completed by the second half of 2017.
"Mainline shippers have agreed to support surcharges on all barrels moving on the mainline to provide an appropriate return on the additional capital required," the companies said in a news release.
Under the L3R Program, all segments of the line between Hardisty and Superior will be replaced with new pipe using the latest available high-strength steel and coating technology.
Long-term integrity costs to maintain the line will be substantially reduced and the reliability of service will be enhanced, they said.
"The Line 3 Replacement Program is an important project for our customers and for Enbridge and aligns very well with our strategic priorities," said Al Monaco, president and Chief Executive Officer of Enbridge Inc.
"The L3R Program will be the largest project in our company's history and will serve to significantly extend our industry-leading earnings per share growth rate well beyond 2017."
Initial development work is already underway to support the regulatory applications that will be submitted in late 2014, Enbridge said.
"This includes an extensive public consultation process with landowners, aboriginal and native American communities, municipalities and counties and other stakeholders along the Line 3 right of way. Further information on the project will be shared with the public in the near future through mailouts and public meetings."
The Canadian L3R Program, between Hardisty and Gretna, Man., currently is estimated to cost approximately $4.2 billion and will be undertaken by Enbridge's wholly-owned subsidiary, Enbridge Pipelines Inc.
The U.S. L3R Program, between Neche, North Dakota and Superior, is estimated to cost approximately US$2.6 billion. The U.S. Program will be undertaken by Enbridge Energy Partners, L.P. with funding provided jointly by Enbridge and EEP at participation levels yet to be finalized.
The program will result in the elimination of $1.1 billion of Line 3 integrity capital which would otherwise be required by 2017, as well as elimination of additional post-2017 integrity capital.
Guy Jarvis, president, liquids pipelines for Enbridge, said the L3R program provides a very attractive solution to Enbridge and its shippers.
"In the long run it is the most efficient way to maintain the line," Jarvis said. "It also improves the reliability of the system, with less down time for inspections and repairs and more operating flexibility."
Mark Maki, president, Enbridge Energy Partners, said the U.S. Line 3 replacement program would provide a significant attractive investment opportunity for EEP, enhancing distributable cash flow growth rate.
Line 3 is a 1,660-kilometre, 34-inch diameter pipeline that has been in operation since 1968.