29 Aug 2014, 9.03 pm GMT
Houston, 29 August (Argus) — The Federal Energy Regulatory Commission (FERC) has granted Enbridge Energy Partners approval to establish a new receipt point on its Lakehead system at Flanagan, Illinois.
The approval is a necessary step in Enbridge’s proposal to build a crude-by-rail site to deliver crude into the southern half of its US pipeline system, skirting northern logjams.
The proposed 140,000 b/d rail terminal could start up as early as the first quarter of 2016. Enbridge was not immediately available for comment, but earlier this month said it was still evaluating the idea.
The proposal is one of two recent moves by Enbridge – the top operator of crude pipeline capacity from Canada to the US – to circumvent the hurdles surrounding efforts to build cross-border pipelines in the Keystone XL era. With the Flanagan receipt point, shippers will be able to send crude by rail to the midcontinent when the overloaded northern portion of Enbridge’s Canada-to-US system is in apportionment.
From there, barrels that otherwise would have been stranded in Canada could be unloaded off railcars and injected into the downstream part of Enbridge’s system, allowing more crude to reach refiners in the midcontinent and the Gulf coast. Without such a system, Enbridge’s upcoming 600,000 b/d Flanagan South pipeline from Flanagan to Cushing, Oklahoma, could run below capacity if too little crude from upstream pipelines makes it to Flanagan. Shipments of heavy crude on Enbridge’s mainline are regularly apportioned, meaning there is more demand than can be met.