TransCanada rival Enbridge pursuing Keystone XL alternative

Enbridge Inc., the largest Canadian pipeline company by revenue, has the commitments it needs from Canadian producers and U.S. refiners to create an alternative to TransCanada Corp.’s Keystone XL pipeline.

Two new pipeline projects for which the Calgary-based company has “significant commitments” will allow Enbridge to move crude from Alberta’s oil sands to Texas coastal refineries, Chief Executive Officer Pat Daniel said in a conference call with investors today.

Enbridge’s line would not face the same opposition or regulatory scrutiny that has slowed progress for the Keystone XL because it duplicates existing routes, Daniel said.

The company, which is now in talks with shippers about the line, doesn’t need a permit from the State Department, which is reviewing the Keystone proposal, because Enbridge’s pipeline does not cross an international border, Daniel has said.

“We expect to conclude those discussions with sufficient volumes to proceed with both segments of the line,” he said today.

The State Department is weighing whether to seek a rerouting of Keystone away from the Sandhills region of Nebraska, where landowners, public officials and environmentalists have said they’re concerned about a spill.

The Nebraska legislature began a special session Nov. 1 to consider whether it can force Calgary-based TransCanada to reroute the pipeline. TransCanada Chief Executive Officer Russ Girling has said finding a new route might kill the project.

Enbridge’s plan is to build two new lines, one from the Chicago area to Cushing, Oklahoma, and the other from Cushing to the Gulf of Mexico.

Same Year

Through its Lakehead system, Enbridge already has the capability to move 2.5 million barrels of crude and other liquids a day to Chicago from Alberta’s oil sands and North Dakota. The new Flanagan South pipeline would move an undisclosed amount of oil to Cushing. From there, Enbridge’s Wrangler pipeline, which it is developing together with Enterprise Products Partners LP, could move 800,000 barrels a day to the Gulf Coast.

The Wrangler could be in service by mid-2013, the same time frame targeted by TransCanada for Keystone XL, Enbridge has said.