Enbridge (TSX:ENB,NYSE:ENB) has introduced plans to assemble and function new crude oil and pure fuel pipelines within the US Gulf of Mexico to assist BP’s (LSE:BP) lately sanctioned Kaskida deepwater improvement.
The crude oil pipeline, known as the Canyon Oil Pipeline System, will include 24-inch and 26-inch diameter pipes with a capability of 200,000 barrels per day. It should originate from the Keathley Canyon space and transport crude oil to Shell Pipeline Firm LP’s Inexperienced Canyon 19 platform.
From there, the oil will probably be additional delivered to the Louisiana market, positioning Enbridge as a key participant in transporting crude from deepwater fields to the US mainland.
Along with the oil pipeline, Enbridge can even assemble a pure fuel pipeline known as the Canyon Gathering System. This 12-inch pipeline may have the capability to deal with 125 million cubic toes of fuel per day.
The Canyon Gathering System will join subsea to Enbridge’s current Magnolia Fuel Gathering Pipeline, which can then transport the fuel to Enbridge’s downstream Backyard Banks Fuel Pipeline, a Federal Power Regulatory Fee (FERC)-regulated pipeline system.
This pipeline will assist make sure the environment friendly supply of pure fuel from the deepwater discipline to markets onshore.
The Kaskida venture, BP’s sixth operated hub within the US Gulf of Mexico, has a manufacturing capability of 80,000 barrels of oil per day from its preliminary section of six wells.
Situated 250 miles southwest of New Orleans within the Keathley Canyon space, Kaskida faucets into roughly 275 million barrels of recoverable oil equal, with potential for added improvement phases primarily based on additional evaluations.
Moreover, the venture additionally performs a essential position in unlocking the potential of as much as 10 billion barrels of found assets throughout the broader Kaskida and Tiber catchment areas. The hub will make the most of superior 20K drilling expertise to develop high-pressure reservoirs in furtherance of deepwater oil extraction efforts.
Enbridge’s agreements with BP are supported by long-term contracts and embrace provisions that may permit BP to doubtlessly join future discoveries in its Paleogene portfolio to the brand new pipeline techniques.
The brand new pipelines will probably be designed to accommodate further connections from different close by oil and fuel fields, permitting for potential future growth.
Enbridge plans to start detailed design work and procurement actions in early 2025, with the pipelines anticipated to turn into operational by 2029. The whole value of the venture is estimated at round US$700 million.
The corporate sees this growth as a part of Enbridge’s broader technique to diversify its offshore enterprise.
“The Canyon Oil and Fuel pipelines provide a sexy alternative for Enbridge to serve clients within the Gulf of Mexico and additional develop our US Gulf Coast footprint,” mentioned Cynthia Hansen, Enbridge’s government vice chairman and president of fuel transmission and midstream.
“The agreements generate secure and predictable money stream and supply future progress alternatives,” she added.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.
