Pipeline transport company Enbridge (NYSE: ENB ) announced Thursday that the company's subsidiary, Enbridge Pipelines, has reached an agreement with oil shippers over the terms of constructing a $1.8 billion, 179-kilometer pipeline expansion in Canada.
The project, which requires regulatory approval and will provide a link between Alberta's major oil storage hubs at Edmonton and Hardisty, will boast an initial capacity of 570,000 barrels per day. The company expects the pipeline to come into service sometime in 2015, with an expanded capacity of up to 800,000 barrels per day eventually possible.
"The agreement with shippers on terms for the expansion continues our collaborative relationship, ensuring that we provide the facilities and services they need to maximize the value of their crude oil," said Stephen J. Wuori, Enbridge's president of liquid pipelines, in the company press release.
Enbridge anticipates filing for regulatory approval by the end of 2012 with Canada's National Energy Board. If the proposal is approved, the company projects construction of the pipeline could begin as soon as early 2014.
This pipeline is one piece of a $12 billion goal of expanding Enbridge's pipeline and transport network to U.S. refineries and markets. It will link up with Enbridge's mainline system in Hardisty -- a city that also marks the starting point for competitor TransCanada's (NYSE: TRP ) Keystone Pipeline project to the U.S. -- that transports oil to Chicago and further points south.