Enbridge may gain from Keystone XL delay

The State Department’s decision to spend more time considering a permit for TransCanada’s Keystone XL pipeline may boost the outlook for a competing pipeline planned by Enbridge, owners of the pipeline that burst in Calhoun County last year.

Over the summer Enbridge – the largest supplier of oil to the U.S. — announced plans to link existing and new pipelines into the “Monarch” line. The northern tier of the project would move tar sands crude and oil from the Bakken fields in North Dakota between the Chicago area and the oil storage hub in Cushing, Okla. The southern portion of the project involves a new line to move oil from Cushing to refineries around Houston.

By avoiding a new international crossing, this project could expand imports of tar sands crude without a State Dept. review. Enbridge says the project could be complete by the end of 2013.

Bloomberg reports that the State Dept. decision to order further study of alternative routes for the Keystone XL may help Enbrige win more customers for its new pipeline.

“Refineries can’t wait however-many months to make decisions about where they’re going to get crude,” Charles Drevna, president of the National Petrochemical and Refiners Association, told Bloomberg.

The Keystone delay, “definitely improves the prospects of the [Enbridge] project going forward,” John Auers, senior vice president of Turner, Mason & Co., a Dallas-based pipeline and engineering consultancy, said in an e-mail yesterday.

Producers decide whether to commit to shipping their crude on new pipelines based on the fees charged and their perceptions of whether the project will get built, Auers said.

Last year’s Enbridge pipeline rupture in Marshall spilled at least 800,000 gallons of Canadian tar sands crude into the Kalamazoo River system and helped build opposition to TransCanada’s project which is slated to cross the sensitive Ogallala aquifer.

The Kalamazoo River remains closed to the public amid continuing cleanup of submerged oil.