Enbridge, BP ink Alberta-Texas Gulf pipeline deal

OTTAWA -- Enbridge Inc. has announced a partnership with BP PLC for a scaled-back plan to bring oil sands crude to the Texas Gulf Coast, a key market where Canadian producers are attempting to make inroads against Venezuelan, Mexican and Persian Gulf competitors.

Earlier this summer, Enbridge shelved a larger Alberta-Texas pipeline proposal, saying there would not be sufficient production in the oil sands to justify the 400,000-barrel-a-day line before 2014.

Yesterday, the Calgary-based company said it and joint venture partner BP will now spend between $1-billion and $2-billion to expand existing pipelines and build new connections to deliver up to 250,000 barrels a day to Gulf Coast refiners by 2012.

With declining production of both Mexican and Venezuelan heavy oil, Alberta producers have an opportunity to supply a growing share of the Gulf Coast refineries that are configured to process heavy oil. The Gulf region is the largest crude oil processing centre in North America, but the market is far from assured for Canadian producers.