FINDLAY, Ohio (AP) — Marathon Petroleum Corp. has agreed to pay for more than a third of the construction cost of the proposed Sandpiper pipeline, the company and Enbridge Energy Partners LP said Monday.
Marathon will be an anchor shipper and fund 37.5 percent of the cost of the estimated $2.6 billion pipeline that would carry crude oil from Beaver Lodge, N.D., across northern Minnesota to Wisconsin. It would extend 610 miles from the Bakken oilfields to an Enbridge terminal in Superior, Wis.
In exchange for Marathon’s commitment to take part in the open season for Sandpiper and its investment, it will earn about 27 percent interest in Enbridge’s North Dakota System when the Sandpiper pipeline is done. Marathon will also have the option to increase its ownership interest to 30 percent through additional investments in future system improvements, the companies said.
The Sandpiper would increase the Bakken takeaway capacity of the North Dakota system by 225,000 barrels per day to a total of 580,000 barrels per day.
In 2012, Marathon agreed to be the anchor shipper on the Enbridge Southern Access Extension pipeline from Flanagan, Ill., to Patoka, Ill. As a result of that commitment, Marathon has the option to acquire a 25 percent ownership interest in Southern Access Extension. Due to Marathon’s commitment to the Sandpiper, Marathon’s option for ownership interest in Southern Access Extension will increase an additional 10 percent to a total of 35 percent.
Marathon is the nation’s fourth-largest refiner. Marathon brand gasoline is sold at about 5,100 independently owned retail outlets across 18 states. Its Speedway LLC subsidiary runs the nation’s fourth-largest convenience store chain, with about 1,470 convenience stores in nine states.
Sandpiper is scheduled to start operating in early 2016.