Enbridge Inc. announced that it has reached a final investment decision on the Mainline Optimization Phase 1 project (MLO1). MLO1 will add capacity to the Company's Mainline network and Flanagan South Pipeline (FSP) to meet customer demand for incremental egress, increasing deliveries of Canadian heavy oil to key refining markets in the U.S. Midwest (PADD II) and Gulf Coast (PADD III). Key details: Expected aggregate capital cost of USD 1.4 billion; Adding 150 kbpd of Mainline system capacity; Adding 100 kbpd of FSP capacity; Capacity is anticipated to be available in 2027.
MLO1 will increase capacity on the Mainline through a combination of upstream optimizations and terminal enhancements. In addition, Enbridge plans to add pump stations and terminal enhancements for FSP to increase capacity and will utilize existing capacity on Seaway Pipeline1. The FSP expansion is underpinned by long-term take-or-pay contracts for full-path service from Edmonton, Alberta to Houston, Texas, which support attractive returns for MLO1.
As part of the open season process on FSP earlier this year, the majority of existing customers elected to extend their existing full-path contracts through the next decade.
