The Canadian oil company, Enbridge — who is actually the largest shipper of oil from Canada to the United States — is further staking a claim in the U.S. market after purchasing a piece of a pipeline. In a US$101.9-million deal, the company has purchased a 65% common share interest in the Washington-based Olympic Pile Line Co. from Arco MidCon LLC.
“The investment in Olympic Pipe Line Co. is consistent with the Enbridge strategy of investing in stable energy-infrastructure assets that come with strong organic growth opportunities,” Richard Bird, Enbridge Group vice president, said. “This investment enables Enbridge to enter the U.S. refined-products pipeline business in a growing market and new geographic region. It also further expands and diversifies the investment base of Enbridge and proves and important window into the U.S. West Coast market.”
Enbridge would assume the shareholder debt related to its share of the purchase. The deal is expected to transpire by year end, after regulatory approvals and closing conditions are met.
At this time, Olympic is the owner of the largest refined pipeline in Washington State, moving 290,000 barrels of gasoline, fuel, and diesel per day. The pipeline runs from Blaine, Washington to Portland, Oregon for a total length of 300 miles. It distributes refined product to terminals in Washington and Oregon and are the only supplier of jet fuel to the Seattle-Tacoma International Airport and one of the largest suppliers for the Portland International Airport. The system consists of 400 miles of piping, a 500,000 barrel products terminal, nine pumping stations, and 21 delivery points or facilities. While Enbridge will assume 65% of the interest, Arco will contain to hold the remaining 35%, while BP Pipelines will stay on as operator.
As it stands right now, Enbridge currently runs the largest crude oil and liquids transportation system. It operates internationally as well and is becoming more and more involved in natural gas.
Just one more reason why Canadian oil and gas producers will outperform in 2006…