Canadian midstream company Enbridge and US independent refiner Marathon Petroleum are buying into the Dakota Access-Energy Transfer Crude Oil pipeline system from the Bakken shale to the Gulf coast.
The new partnership will end an agreement Enbridge and Marathon had on the Sandpiper system out the Bakken, making the future of that project uncertain.
The companies will pay a combined $2bn for 36.75pc of the 470,000-570,000 b/d project, together known simply as the Bakken pipeline system. Project developers and sister companies Energy Transfer Partners (ETP) and Sunoco will retain a 38.25pc equity share, while independent refiner Phillips 66 — the anchor shipper — will continue to own 25pc.
The deal is expected to close by the end of next month. Once that happens, Marathon's commitment on Enbridge's planned 225,000 b/d Sandpiper pipeline linking the Bakken to its trunk system will terminate.
Regulators in Minnesota have delayed Sandpiper until at least 2019, and Enbridge has said its replacement of Line 3 from Alberta into the US has been contingent on Sandpiper. Now the future of both projects is murky.
"The scope and timing of the Sandpiper pipeline project will be evaluated during [this] quarter to ensure that it is positioned to meet the growing need for pipeline capacity while offering customers competitive tolls and strong netbacks," Enbridge, which will retain full ownership of its legacy North Dakota crude pipeline system, said.
The deal also heightens the mystery surrounding the 1.2mn b/d Capline system from St James, Louisiana, to Patoka, Illinois — essentially the midpoint of the Bakken system. Marathon and fellow owner Plains All American Pipeline favor reversing the line, but co-owner BP has maintained the status quo.
Enbridge, Marathon and ETP did not return requests for comment.
