The majority of the assets, involving systems located at, or originating from, Cushing, OK, will be acquired by Enbridge Energy Partners for approximately $131 million, while a wholly-owned subsidiary of Enbridge will acquire two smaller systems in the Wood River/Patoka corridor in southern Illinois for $9.5 million. Closing of the purchases is anticipated to occur shortly, subject to regulatory approvals and rights of first refusal.
The Shell systems involved consist of three different pipelines totalling 980km in length, and two crude oil storage terminals with a total capacity of 9.5MMbrl. The two smaller systems include a 60% interest in the Woodpat pipeline from Wood River, Illinois, to Patoka, Illinois, plus a 500,000-brl terminal at Patoka.
Patrick Daniel, president and chief executive officer of Enbridge, said: “The southern Illinois assets being acquired directly by Enbridge involve a small investment but play an important role within our overall market access initiative. This initiative is intended to enhance value to Canadian producers by providing access to new markets for their crude oil. The Woodpat pipeline will complement the previously-announced Spearhead and Southern Access pipelines by providing an additional connection to Patoka. From Patoka we plan to provide enhanced access to new markets; Patoka is also one of the potential jumping-off points for alternative paths to new markets on the US Gulf Coast, to which we are planning to develop access.”