Enbridge sees strong demand for more oil pipeline capacity from Canada to US Gulf

Reuters

6 days ago

Aug 1 (Reuters) - Canadian pipeline operator Enbridge (ENB.TO), opens new tab, said on Friday its recent commercial process to gauge oil shippers' interest in an expansion of its Flanagan South pipeline was oversubscribed, indicating strong demand for additional oil transport capacity from Canada to the U.S. Gulf Coast.
The success of the Flanagan South open season — an industry term for the binding process pipeline companies use to notify shippers of available capacity and solicit bids — brings Enbridge closer to formally sanctioning its proposed expansion of its Mainline network, CEO Greg Ebel said on a conference call.
He said Enbridge plans to make a final investment decision on the first phase of the project, which would add 150,000 barrels of capacity to the Mainline system, before the end of this year.
Enbridge's Mainline is the largest pipeline system in North America, with the capacity to move 3 million barrels per day of crude from Western Canada to markets in Eastern Canada and the U.S. Midwest. Flanagan South is a 954-km (593-mile) connector pipeline running from Illinois to Cushing, Oklahoma, and is part of the larger Mainline network.
The Mainline system was in apportionment — a term that means demand has exceeded available pipeline capacity — for six of the first eight months of 2025, Ebel said.
Canadian oil shipments to the U.S. are exempt from tariffs, and output from Canada's oil sands continues to rise. A recent report from S&P Global estimated Canada's oil sands will produce 3.8 million bpd of crude by 2030, a 15% increase from current levels.
Canada's Trans Mountain pipeline, which ships oil from Alberta to British Columbia's west coast, where it can be exported overseas, is eyeing its own capacity increases.
Polls in Canada — the world's fourth-largest oil producer — have shown an uptick in domestic support for a new oil pipeline to overseas markets, but no private company has indicated
interest in building
such a project. Ebel said on Friday a new pipeline is unlikely unless the federal government repeals some of its environmental policies, such as a proposed cap on greenhouse gas emissions from the oil sands as well as an existing ban on oil tankers off British Columbia's northern coast.
Enbridge earned adjusted profit of 65 Canadian cents per share for the quarter ended June 30, beating analysts' average expectation of 57 Canadian cents, according to data compiled by LSEG.
The company reported quarterly net income of C$2.18 billion.
($1 = 1.3869 Canadian dollars)