CALGARY - Enbridge Inc. (TSX:ENB) says the cost of overhauling its Line 3 oil pipeline between Alberta and Wisconsin is ringing in at $7.5 billion, about seven per cent higher than when the massive project was first announced in March.
The Calgary-based pipeline giant says the increase relates to the Canadian side of the pipeline.
Also Wednesday, Enbridge said it's raising $400 million in financing by selling 7.86 million of its common shares through an agreement with RBC Capital markets and Credit Suisse.
Line 3 is one of six arteries that make up Enbridge's Canadian mainline, a key piece of infrastructure that moves Alberta crude east.
The Line 3 replacement project is the largest in Enbridge's history. The company decided replacing the 46-year-old line in its entirety using improved steel and coating was a more cost-effective option than maintaining it in the long term.
Shippers have agreed to pay a toll surcharge over a 15-year span, which will be adjusted to reflect 75 per cent of the cost increase.
The upgrade will enable the line to pump a maximum of 760,000 barrels per day, up from the 390,000 that it is currently able to move, according to Enbridge's own engineering analysis. The revamped Line 3 is expected to be up and running in the latter half of 2017.
The announcement came a day after the federal government gave the green light to Enbridge's controversial Northern Gateway pipeline to the West Coast, provided 209 conditions are met.
However, Enbridge says it has a lot of work to do before it decides to break ground on that project. Northern Gateway faces a litany of legal challenges and staunch opposition in British Columbia.
Speaking to reporters on Tuesday, CEO Al Monaco touted the billions Enbridge is investing in other projects that will connect oilsands crude to eastern and southern markets.