US energy group Enbridge's subsidiary Enbridge Energy Partners (EEP) has decided to freeze its proposed Sandpiper crude oil pipeline project in the United States. EEP has completed a review of Sandpiper and concluded that the project should be delayed until such time as crude oil production in North Dakota recovers sufficiently to support development of new pipeline capacity. Based on updated projections, EEP believes that new pipeline capacity will not likely be needed until beyond the Company's 5-year planning horizon. EEP will then withdraw regulatory applications pending with the Minnesota Public Utilities Commission.
The 991 km Sandpiper pipeline was expected to deliver 225,000 bbl/d from Beaver Lodge in the Bakken shale play in North Dakota to Clearbrook in Minnesota; the second part of the pipeline, with a capacity of 375,000 bbl/d, would have connected Clearbrook to Superior in Wisconsin. The construction phase was expected to start before the end of 2014 to enable a commissioning in 2016. Delays in the authorisation process postponed the project, as the Minnesota regulator has decided to split the review into two separate hearings. In October 2014, Enbridge delayed the commissioning from 2016 to 2017 and the project has been delayed again in a context of falling oil prices.
As announced in August 2016, Enbridge will focus on the existing Bakken Pipeline: EEP and Marathon Petroleum have just formed a new joint venture, which will acquire a 49% interest in the holding company that owns 75% of the Bakken Pipeline System, from an affiliate of Energy Transfer and Sunoco Logistics. Under this arrangement, EEP and Marathon Petroleum would indirectly hold 75% and 25%, respectively, of the joint venture's 49% interest in the holding company of Bakken Pipeline. The purchase price of EEP's effective 27.6% interest in the System is US$1.5bn. Closing of the transaction is subject to certain conditions, and is expected to occur in the third quarter of 2016.