PHMSA Approval Needed to Restart Texas Eastern Pipeline

The U.S. Pipeline and Hazardous Materials Safety Administration issued a corrective action order last week to Enbridge Inc., on its Texas Eastern pipeline in Kentucky that was damaged in a blast on Aug. 1. The company has to perform several tasks before the regulator will allow any flows through the blast site, near Danville, Kentucky.

Enbridge said in a release on Friday it was “working diligently to comply with the requirements identified by the PHMSA, and to return to service two adjacent natural gas pipelines near the incident site that were taken out of service as a precautionary safety measure.”

Texas Eastern pipeline system includes three lines, Lines 10, 15 and 25, between its Danville and Tompkinsville compressors in Kentucky that make up its 30-inch system. According to PHMSA, despite the fact that the blast occurred on Line 15, Enbridge could not restart Lines 10 and 25 without further investigation, as the blast might have also damaged Lines 10 and 25.

Enbridge must uncover and inspect parts of the lines and perform mechanical and metallurgical testing, among other things, before restarting gas flows through the blast site, PHMSA said. The blast killed one person, injured at least six other people, destroyed multiple structures and caused a fire that damaged about 30 acres.


Enbridge Open to Re-Route Line 5 After Legal Action

Enbridge Inc. stated that the company is willing to consider rerouting a section of Line 5 pipeline around the Bad River Reservation in northern Wisconsin. Line 5 carries 540,000 barrels per day of Canadian crude and propane to eastern Michigan.

Bad River Band of Lake Superior Chippewa, a Native American tribe in Wisconsin sued the company on Tuesday seeking to shut the pipeline and remove sections of its Line 5 pipeline that run across their reservation due to the risk of a leak.

According to the Bad River Band, it's increasingly likely that the 66-year-old line will rupture and cause catastrophic damage. In 2017, the tribe decided not to renew easements that runs across 12 miles of the Bad River Band of Lake Superior.

“The vast majority of the easements through the reservation extend until 2043; those in question affect only a small fraction of the twelve miles of Line 5 within the reservation. Enbridge has considered re-routing Line 5, and as discussed with the Bad River Band, remains open to this option as a solution,” Enbridge spokeswoman Juli Kellner said in a statement. 


Indian Tribe in Wisconsin Sues Enbridge

A lawsuit against Enbridge Inc. was filed on Tuesday by the Bad River band of Lake Superior Chippewa aimed at forcing the company to shut down Line 5 pipeline that crosses tribal lands in northern Wisconsin.

Line 5 pipeline transports oil and natural gas liquids from Canada to Michigan. This includes a controversial section that runs along the bed of the Straits of Mackinac between Lake Michigan and Lake Huron. 

Enbridge is seeking to build a tunnel beneath the straits for a new pipeline, but tribal officials say that they no longer want Enbridge to operate the pipeline on tribal lands and fear that a rupture would pose grave environmental damage to the Bad River and other waters that flow to Lake Superior.

“As a community, we are sick of having to bear the fear and anxiety of this line being a constant threat to our community and resources,” said Dylan Bizhikiins Jennings, a tribal member. An Enbridge pipeline spill in 2010 on the Kalamazoo River in Michigan took years and more than $1 billion to clean up. 

“Enbridge has been in good faith negotiations with the Bad River band of Lake Superior Chippewa tribe regarding these easements since 2013,” said Enbridge spokeswoman Juli Kellner in a statement. Line 5 pipeline crosses about 12 miles of reservation lands, according to court documents.


Open Season Delayed for Mainline Oil Pipeline System

Three market sources told Reuters that Enbridge Inc., has delayed the start of an open season to solicit bids for contracted space on its Mainline oil pipeline system, North America's largest oil-shipping network. Although Enbridge said previously that the open season was meant to start in mid-July and last for two months, the reason for the delay was not immediately clear.

"We have been in discussions with interested shippers and are working to accommodate to their needs. We anticipate on holding the open season soon," Enbridge spokeswoman Tracie Kenyon said in an emailed statement when asked about the delay.

The Mainline system is a common carrier system in which shippers submit monthly bids for capacity, but Enbridge plans to turn that to one that is mostly contracted for up to two decades. By locking shippers into long-term contracts, Enbridge will have a chance to capitalize on delays to competitors' plans to build pipelines, and secure future cash flow at a time when anxiety about market access is dominating headlines.

Approval from Canada's National Energy Board regulator is needed for changes to the Mainline system and would take effect in 2021.


Court Rules Against Enbridge’s Line 3 Replacement Project

Minnesota State Court of Appeals ruled on Monday that the environmental assessment done on Enbridge’s Line 3 pipeline replacement project was inadequate. The ruling is just the opposite of Minnesota Public Utilities Commission’s decision, which approved the environmental impact statement for the pipeline replacement.

The proposed replacement pipeline will have the capacity to move 370,000 barrels of oil per day. The company plans to replace its existing 282 miles of 34 inch pipeline with 337 miles of 36 inch pipe. The project has faced numerous legal challenges and has been approved and disapproved several times over.

The startup date for the pipeline replacement project was originally supposed to be at the end of 2019.  As per the court, the Commission made a mistake when it approved the plan, and found that Enbridge’s environmental impact statement lacked in details about where it deals with oil spills in relation to Lake Superior.


Michigan AG Warns to Shut Pipeline in June If No Deal

Michigan Attorney General Dana Nessel said on Wednesday that if the Governor Gretchen Whitmer cannot reach a resolution with operator Enbridge, she will move to shut Line 5 which runs under the Straits of Mackinac in June.  

Nessel said the state is in "great peril" the longer the oil continues to flow under a sensitive waterway. AG said that she was hopeful that the governor would have a plan for decommissioning the 66-year-old pipes by June 1.

"My team has been meeting on this since the first day that I took office. I want to obviously act quickly because I think every day that Line 5 continues to run is a day that our state is in great peril," Nessel told The Associated Press at the Detroit Regional Chamber's policy conference.

Line 5 carries about 23 million gallons of crude oil daily between Superior, Wisconsin, and Sarnia, Ontario. Although environmental groups says that the underwater segment that traverses the Straits of Mackinac is a spill hazard and should be decommissioned, Enbridge says it is in good shape and could operate indefinitely.


Line 3 Replacement Project Could Exceed C$9 Billion

Delays to permits in the United States will cause Line 3 replacement project cost to exceed previous cost estimate of C$9 billion ($6.71 billion), Enbridge Inc, said on Friday.

The company said in March that the in-service date would be the second half of 2020 and reason for the delay is of slower-than-expected permitting in the U.S. state of Minnesota. Line 3 will carry 760,000 barrels per day of western Canadian crude to U.S. markets, once completed.

“The late schedule likely means higher costs on the U.S. side although we are running under budget in Canada,” Enbridge chief executive Al Monaco said, adding that returns remained “very robust” and the company did not expect any cost overruns to be material to its financial outlook.


Protestors Rally Outside Governor's Mansion After Enbridge Given Line 3 Permission

Protesters rallied outside the Minnesota governor’s mansion in St. Paul three days after a state regulator gave Enbridge permission to replace its 50-year-old Line 3 oil pipeline.

The pipeline will follow an existing path from Canada to Wisconsin, going through Minnesota before bypassing the Leech Lake reservation. Enbridge’s decision to replace the aging pipeline is said to double oil transportation as well as create jobs and generate revenue. Critics believe that the company chose money over the environment despite Enbridge's efforts to minimize any chance of enviornmental damage.

Passionate protesters have said that they won’t make it easy to build the pipeline, vowing to create physical blocks if legal ones fail.

Enbridge plans to finish the new pipeline within a year but is required to remove any parts of the old line that are not being used as well as guarantee cleanup of any environmental damage.


Enbridge, Williams Consolidate Respective Pipeline Assets After New Tax Policy

Enbridge Inc and Williams Cos are consolidating their respective pipeline assets after the Federal Energy Regulatory Commission in March proposed a tax overhaul that removes specific benefits for master limited partnerships.

Enbridge plans to bring its independent units and liquids and gas pipeline assets under a single listed entity valued at US$8.94 billion.

Williams said it would buy out the remaining stake in its MLP Williams Partners LP in a $10.5 billion deal.

These decisions come after FERC said in March that MLPs, specifically oil and natural gas pipeline companies, would no longer be able to recover an income tax allowance as part of the fees they charge to shippers as a cost of service.

Enbridge also added that it would buy outstanding shares of Spectra Energy Partners and Enbridge Energy Partners, to name a few. The transaction will not affect the stakes held by shareholders in those companies, Enbridge said.


Enbridge Sells U.S. Gas Pipelines, Renewables for $2.5 Billion to Help Reduce Debt

Enbridge Inc. said Wednesday it will sell a U.S. gas pipelines business and some of its renewable portfolio for a combined $2.5 billion as part of its efforts to reduce debt.

Enbridge has been pressured to sell non-core assets since its $28 billion takeover of Spectra Energy last year. The company has a long-term debt pile of more than $60 billion, which is alarming credit rating agencies.

Enbridge said it will sell its U.S. gas pipelines unit to Midcoast Operating LP for $1.12 billion and sell a 49 percent stake in its wind and solar power assets in North America and Germany to the Canada Pension Plan Investment Board for C$1.75 billion (U.S.$1.37 billion).

Enbridge on Wednesday also filed a formal response to Minnesota judge's recommendation that its Line 3 replacement pipeline be built in the existing right-of-way through the state rather than by way of Enbridge's preferred route.

The pipeline company said building the pipeline through the existing right-of-way would mean the current Line 3 pipeline would have to be shut down for nine to 12 months, which would negatively impact Minnesota's energy supply.


Enbridge to Cut 1,000 Jobs after Acquiring Spectra Energy

Enbridge Inc announced Wednesday that it plans to cut 1,000 jobs as part of its organizational structure after its purchase of Houston-based Spectra Energy Corp.

In late February Enbridge completed its $28 million purchase of Spectra Energy, creating arguably the largest pipeline and energy infrastructure company in North America.

The merger includes all of Enbridge's oil pipeline, rail, and electric transmission holdings as well as Spectra's 90,000-mile gas pipeline network.

As part of its organizational structure, as well as to eliminate duplicate positions, Enbridge will reduce its workforce by about 1,000, an action commonly taken in a merger. The company did not elaborate on which positions it will cut.

Despite the necessary workforce reduction, Enbridge's long-term plan is to grow. CEO Al Monaco said the merger will increase the company's network of gas and natural gas liquids pipelines, a resource he believes is going to be a huge part of the future.


Major Texas Oil Pipeline Back in Service after Rupture

A major Texas oil pipeline that was shut down after a rupture resumed operations Sunday after necessary repairs, according to Seaway Crude Pipeline Co.

The 500-mile Seaway S-1 oil pipeline, a 50/50 venture between Enterprise Products Partners and Enbridge Inc, was shut down last week after it was punctured by a third party contractor working on road construction. Oil spewed several stories high into the air and onto a major Dallas highway.

Pipeline representatives have not reported how much oil was spilled from the incident, but no injuries or fires occurred as a result.

The Seaway S-1 carries 400,000 barrels per day from Cushing, Oklahoma down to the U.S. Gulf Coast.



Enterprise Products Partners: Seaway Pipeline to Resume Operation after Rupture

A major Texas oil pipeline that was shut down Tuesday after a rupture and leak will resume operation on or before next Tuesday, according to pipeline operator Enterprise Products Partners.

A section of the 500-mile Seaway S-1 oil pipeline was struck by a third-party contractor during construction in Dallas, Texas on Monday, sending oil stories-high into the air and onto a major highway.

According to a company statement, Enterprise Products Partners is making progress in repairing the line, which the company shut down after the incident.

The Seaway S-1 pipeline carries 400,000 barrels per day of crude from Cushing, Oklahoma to the Gulf Coast. The pipeline is a 50/50 joint venture between Enterprise Products Partners and Enbridge Inc.



Major Texas Oil Pipeline Remains Shut After Rupture

A 500-mile oil pipeline owned by Enterprise Products Partners and Enbridge Inc. was punctured by a construction worker during road work on Monday, gushing oil several stories high and onto a highway northeast of Dallas.

The Seaway S-1 pipeline has been shut down and remains shut as of Tuesday while crews work on cleanup procedures. A section of State Highway 121 near Trenton also remains closed to prevent accidents on the roadway.

Pipeline representatives were not immediately able to indicate how much oil was spilled.

A contractor working for the Texas Department of Transportation accidentally punctured the high-pressure pipeline while working on the road. No injury or fire as a result of the incident was reported.

The pipeline is operated by Seaway Crude Pipeline Company, which is a joint venture between Enterprise and Enbridge. Seaway announced in a statement Monday that the company is developing "a plan to resume operations as quickly and safely as possible."

The Wall Street Journal

Seaway Pipeline in Cushing Temporarily Shut After Oil Spill

Seaway Pipeline Map (  Seaway Pipeline  )

Seaway Pipeline Map (Seaway Pipeline)

Pipeline developers temporarily shut down service on an oil pipeline system in Cushing, Oklahoma after an oil spill occurred on the line late Sunday night.

An older section of the Seaway pipeline, a joint venture between Enterprise Products Partners and Enbridge that delivers oil to the Texas Gulf Coast, was shut down as a precaution after officials detected a leak of an undisclosed amount of oil that did not cause any injuries, fires, and was not a threat to the public.

According to Seaway Crude Pipeline Co., the spill occurred in an industrial area of Cushing near Linwood Avenue and Texaco Drive. The spill occurred on Enbridge property only and has been contained in a retention pond at Enbridge’s facility.

Seaway said in a news release that the company is continuing to make efficient progress in cleaning up the spill, using vacuum trucks to recover the crude.

The amount of oil spilled will not be disclosed until cleanup efforts are complete, according Enterprise Products Partners.

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The Oklahoman

Enbridge Cuts Jobs; Not Related to Spectra Merger

Enbridge Inc. on Wednesday cut 530 jobs across its Canada and U.S. hubs in order to help achieve its long-term strategy of growth and diversification.

Most of the job cuts occurred in the Canadian offices, but 160 of the 530 job losses came from U.S. offices. Of those 160 cuts, 45 of them occurred in Houston.

Enbridge spokesman Michael Barnes stated that the cutbacks are not related to the company's recent purchase of Spectra Energy, a deal that may potentially create the largest oil and gas pipeline company in North America.

According to Barnes, the cutbacks follow the company's goal to enhance its competitiveness and allow it to capitalize on opportunities now and in the future.

Fuel Fix

Enbridge to Sell Pipeline Assets in South Prairie Region for US$820 Million

Enbridge Inc. announced on Thursday that it will sell its pipeline assets in the the Canadian provinces Saskatchewan and Manitoba to Tundra Energy Marketing Limited for C$1.08 billion (US$820 million). The transaction does not include the company’s share of the Bakken Expansion Pipeline.

Enbridge, which just purchased Spectra Energy to create the largest pipeline operator in North America, is selling its non-core assets to assist in funding its growth program, according to Enbridge CFO Officer John Whelen.

"In conjunction with the proposed Spectra Energy merger, we announced our intention to divest of approximately $2 billion of non-core assets over the next year to further strengthen Enbridge Inc.'s consolidated balance sheet and provide for additional financing flexibility," said Whelen in a statement.

The transaction is expected to close by the end of this year.

Enbridge Inc.

Thumbnail photo: (Google Maps)

Enbridge: Northern Gateway Will Not Appeal Court Decision on Proposed Pipeline

Northern Gateway Pipeline Map (Northern Gateway)

Developers of the Northern Gateway pipeline said they will not appeal a federal court decision to overturn permits for the pipeline that would run to Canada’s pacific coast.

The Federal Court of Appeal ruled on June 30 that the National Energy Board’s previous approval of the Northern Gateway pipeline was acceptable on the condition that Enbridge seek further consultation with aboriginal groups.

“We believe that meaningful consultation and collaboration, and not litigation, is the best path forward for everyone involved. We look forward to working with the government and Aboriginal communities in the renewed consultation process,” said John Carruthers, President of the Northern Gateway project at Enbridge, in a statement.

The Northern Gateway pipeline would run approximately 1,177 kilometers (731 miles) carrying crude oil and blended bitumen from Bruderheim, Alberta to Kitimat, British Columbia.

Northern Gateway

Enbridge Energy to Buy Spectra Energy for $28 Billion

Canadian-based Enbridge Energy agreed on Tuesday to buy Texas-based Spectra Energy for $28 billion, potentially creating the largest North American energy-infrastructure company.

The companies announced the merger jointly, and the boards of both companies are fully supportive of the deal.

Under the deal, Spectra Energy shareholders will receive Enbridge shares valued at $40.33 each based on the closing price on Friday.

Enbridge shareholders will own roughly 57 percent of the combined company, which will be called Enbridge Inc., and Spectra Energy shareholders will own the other 43 percent.

Al Manaco, Chief Executive Officer of Enbridge Energy, will continue his role with the merger while Spectra Energy Chief Executive Officer Greg Ebel will become a nonexecutive chairman.

The merger is estimated to save the companies about $415 million in costs. The deal is expected to close in the first quarter of 2017.

Wall Street Journal
New York Times