(Reuters) -Canadian pipeline operator Enbridge on Friday approved a $1.4 billion expansion of its Mainline and Flanagan South pipelines, adding new capacity for Canadian heavy crude into the U.S. Midwest and Gulf Coast.
The project adds additional takeaway capacity for Canadian crude and broadens access to U.S. refineries, improving the flow of oil sands to major export outlets.
This comes as Enbridge balances liquids growth with its push into natural gas utilities and low-carbon fuels.
Enbridge said Mainline Optimization Phase 1 (MLO1) will add 150,000 barrels per day to its Mainline network and 100,000 bpd to the Flanagan South Pipeline (FSP), with the additional capacity expected to come online in 2027.
“MLO1 adds capital-efficient and timely egress from Canada, supporting production growth and improving connectivity to the best refining markets in North America,” said Colin Gruending, Enbridge’s president of liquids pipelines.
The company’s Mainline pipeline, capable of moving 3 million barrels per day of crude from Western Canada to Eastern Canada and the U.S. Midwest, shipped a record 3.1 million bpd on average in the third quarter.
MLO1 will increase Mainline capacity through upstream optimizations and terminal upgrades, while on FSP, Enbridge will add pump stations and expand terminal capacity.
The expansion is supported by long-term take-or-pay contracts for the entire route from Edmonton to Houston.
(Reporting by Pooja Menon and Arunima Kumar in Bengaluru; Editing by Vijay Kishore)
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