Enbridge to build $ 250 mm deepwater pipeline

Enbridge announced it has entered into a Letter of Intent with Chevron USA, Statoil Gulf of Mexico and Marubeni Oil & Gas (USA) to construct and operate an oil pipeline from the proposed Big Foot ultra deepwater development in the Gulf of Mexico.
This proposed crude oil pipeline project is complementary to Enbridge's previously announced plans to construct the Walker Ridge Gathering System, which will provide natural gas transportation for the proposed Chevron-operated Jack, St Malo and Big Foot fields.

The estimated cost of the Big Foot Oil Pipeline, which will be located about 170 miles south of the coast of Louisiana, is approximately $ 250 mm. Combined with the Walker Ridge Gathering System project, the proposed oil pipeline would bring the total Enbridge investment for the projects to $ 750 mm.
"The Big Foot Oil Pipeline reinforces Enbridge's presence as the leading pipeline services provider in the deepwater Gulf of Mexico region," said Patrick D. Daniel, President and Chief Executive Officer, Enbridge. "We are particularly pleased with our expanding relationship with Chevron, one of the major operators in the region, and our growing oil pipeline business in the deepwater region, which has substantial production growth potential. Like the Walker Ridge Gathering System, the Big Foot Oil Pipeline will have investment risk and return characteristics comparable to Enbridge's normal business model."

Added Daniel, "The Big Foot Oil Pipeline and Walker Ridge Gathering System projects further complement Enbridge's strong portfolio of commercially secured projects and support our expectation that we will be able to extend our 10 % plus 2008-2013 average growth rate at a similar rate well beyond 2013."
"Enbridge has ample financial capacity to fund the equity component of the combined $ 750 mm investment in these two offshore projects from internally generated cash flow and surplus balance sheet equity, as well as to accommodate additional opportunities which we have under development."
The Big Foot Oil Pipeline will consist of approximately 40 miles of 20-inch diameter pipe at depths of up to 5,900 feet, and will have capacity to transport up to 100,000 bpd. Big Foot will deliver to a sub-sea connection on existing deepwater pipeline infrastructure.

Enbridge offshore pipelines transport about 40 % of all deepwater Gulf of Mexico natural gas production and include joint venture interests in 12 transmission and gathering pipelines in six major pipeline corridors in Louisiana, Mississippi and Alabama offshore waters of the Gulf of Mexico. The system moves on average approximately 30 % of the Gulf of Mexico natural gas production at a rate of 2.5 bn cfpd.
Additionally, Enbridge operates -- in Canada and the United States -- the world's longest liquid petroleum pipeline system, which delivers more than 2 mm bpd of crude oil and liquids primarily from reserves in Western Canada to refining centres in the Midwest and Ontario, Canada.

Enbridge, a Canadian company, is a North American leader in delivering energy. As a transporter of energy, Enbridge operates, in Canada and the US, the world's longest crude oil and liquids transportation system. The company also has a growing involvement in the natural gas transmission and midstream businesses, and is expanding its interests in renewable and green energy technologies including wind and solar energy, hybrid fuel cells and carbon dioxide sequestration.
As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 6,000 people, primarily in Canada and the US.