Enbridge to ship crude to Philadelphia via rail
Canada’s Enbridge Inc. (TSX, NYSE:ENB) announced Monday its has entered into an agreement with Canopy Prospecting Inc. to develop rail facilities that will deliver crude oil from the Bakken shale prospect in North Dakota to Philadelphia refineries by the third-quarter of 2013.
The $68 million plan will upgrade existing tracks to accommodate 120-car trains, lease a power generation facility, and refurbish a 200,000-barrel tank. The the largest transporter of Canadian oil to the U.S. also said it will work on Philadelphia-area pipelines to deliver the crude.
The project, expected to handle 80,000 barrels per day in the third quarter 2013 up to 160,000 by mid-2014, comes on the heels of massive changes in the East Coast refining business, where nearly 25% of the capacity was lost in the last two years due to closures driven by high costs and declining profits.
Enbridge will own 75% of the joint venture and serve as operator during construction and operation of the facility.
"The Eddystone Rail Company will be the largest unit-train facility able to receive North Dakota Bakken and other light sweet crudes directly into Philadelphia area refineries," said Jack Galloway, President of Canopy Prospecting, Inc. "At nearly one million barrels per day, the region is second only to Houston in the concentration of light sweet refining capacity. Eddystone will be the first to provide access directly to those refineries from a rail facility."
The company also said today it has launched a $200 million preferred share offering, expected to close on Dec. 5.
Image courtesy of The U.S. National Archives