Rise in the East


IT’S NOT VERY OF­TEN THAT WE CAN talk about a new oil pipe­line open­ing in this coun­try. In fact, some mem­bers of Canada’s en­ergy in­dus­try weren’t even alive when many of Canada’s main trans­mis­sion lines were built. But in De­cem­ber, while we didn’t get to talk about a new pipe­line per se, we did get to talk about the next best thing. That’s when the se­cond and fi­nal phase of En­bridge’s Line 9 re­ver­sal pro­ject was com­pleted and oil from Western Canada and North Dakota be­gan to flow from ter­mi­nals in south­west­ern On­tario to two re­finer­ies in Que­bec.

Those re­finer­ies, one owned by Sun­cor and one by Valero En­ergy, could even­tu­ally run ex­clu­sively on North Amer­i­can oil once the re­versed line reaches its full ca­pac­ity. That new east­ward flow is al­ready draw­ing crude away from the Cush­ing, Ok­la­homa hub, as En­bridge’s Spear­head pipe­line from Illinois to Cush­ing is ex­pected to op­er­ate below ca­pac­ity in De­cem­ber and Jan­uary for the first time in more than two years. That should help al­le­vi­ate some of the stor­age short­age at Cush­ing that’s still weigh­ing on the WTI price, while also giv­ing Western Cana­dian crude a much-needed shot in the arm. En­bridge’s share­hold­ers, mean­while, are also see­ing some of the shine – per­haps as a re­sult of those pos­i­tive ex­pec­ta­tions. In the same week that fel­low pipe­line com­pany Kin­der Mor­gan gut­ted its quar­terly div­i­dend by more than 75 per cent to 12.5 cents per share, En­bridge raised its own by 14 per cent to 53 cents.

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