CALGARY - Enbridge Inc. and its U.S. affiliate are spending $6.2 billion on a series of projects to bring growing volumes of Alberta and North Dakota light oil to market.
The Calgary-based company (TSX:ENB) says it has enough shipper support to go ahead with its light oil market access program, which will see an additional 400,000 barrels per day of light oil flow to refineries in Ontario, Quebec and the U.S. Midwest.
"These market access initiatives reflect changing North American supply and demand fundamentals and will create significant value for our customers," said CEO Al Monaco in a release Thursday.
Refineries in the eastern part of the continent currently rely on imported crude, which is more expensive than the domestic oil that Enbridge aims to send their way.
A supply glut of inland crude has been dampening producers' profits, so those companies have been eager to find more lucrative markets for their oil.
The program includes a $2.5-billion expansion to a pipeline system in North Dakota, the heart of the booming Bakken shale formation.
Production in the Bakken has grown from 200,000 barrels per day to 700,000 barrels per day in the last five years. That rate could expand to 1.2 million barrels if there were enough pipelines out of there, Enbridge said.
Another 100,000 barrels per day are expected to flow from Alberta light oil pools such as the Cardium and Viking, which have experienced a renaissance of sorts thanks to advances in drilling technology.
Enbridge is also expanding its U.S. mainline system, boosting Canadian mainline terminal capacity and scaling up projects to ship more crude to Ontario and Quebec.
The projects are expected to come in service between 2014 and 2016.
Enbridge's U.S. affiliate, Enbridge Energy Partners (NYSE:EEP) will contribute $3.4 billion to the program.
Also Thursday, Enbridge boosted its quarterly dividend by 12 per cent to 31.5 cents per share.