Enbridge's Great Lakes to Gulf Coast series (Part 13)
At Enbridge, we connect North Americans to the energy, and the quality of life, they’ve come to expect.
Through the opening of our Flanagan South and Seaway Twin lines, we recently established the industry’s first large-volume pipeline network from Western Canada to Texas – linking our established Lakehead system to the U.S. Gulf Coast; fulfilling our Western Gulf Coast Access initiative; and delivering a secure, stable supply of North American crude to the heavy-oil refining market in the Houston area.
As a salute to this historic event, we’ve produced the Great Lakes to Gulf Coast series at the @enbridge blog – speaking to contractors, elected officials, business owners, and community residents at various points along our U.S. system.
Today, we wrap up the Great Lakes to Gulf Coast series by presenting a Q&A session with Enbridge Inc. President and CEO Al Monaco.
Q: What do the completion of the Flanagan South and Seaway Twinning projects represent for Enbridge, and for the overall energy industry?
Al Monaco: At the highest level, it’s the first large-volume full path from Western Canada to the U.S. Gulf Coast – the largest oil refining center in North America – as well as the ability to access key refining markets along the way.
For Enbridge, it represents the lynchpin of our market access strategy and our vision of opening up new markets for crude.
For industry, it enables producers to receive the best possible pricing for crude – critical to all Canadians who benefit when we get fair pricing for our limited natural resources. Refiners benefit from a highly desirable and secure source of feedstock that can replace waterborne imports – and that supports energy security on this continent.
In a nutshell, marrying up Canadian crude with U.S. refining capability generates a true synergy and competitive advantage for North America.
Q: How do these projects fit into the bigger picture and the changing North American energy landscape?
Al Monaco: Much of it has to do with the reconfiguration of North America’s energy transportation grid. In the past, because of declining production, the continent has been focused on importing crude and bringing it in from the coast. Now, of course, because of the huge ramp-up in supply, you’re seeing a reconfiguration, moving inland production to coastal markets. That’s important. If you’re a producer, you want access to coastal markets – because that gets you world pricing.
We’ve also been able to utilize existing pathways, corridors, and infrastructure to the maximum extent possible, in order to make all of this happen. This pathway has been stitched together over quite a number of years, driven by seeing the underlying trends – the reconfiguration of the grid, and the need to get supply to the appropriate markets.
Q: Building energy infrastructure can be challenging in today’s environment. What factors were key in completing the Flanagan South project?
Al Monaco: We’ve always had a priority to make safety and reliability the most important consideration when developing infrastructure. But I would say that we made it even more so, in this case, and it pervaded our entire approach to the project.
In the past, pipeline and infrastructure companies have been fairly bold in telling people what they were going to do, as opposed to listening and responding. With Flanagan South, we didn’t go in with any preconceived notions. The first thing we did was talk to the communities about their concerns and what they wanted to see from us. It was about gaining an understanding of their concerns – but, more importantly, getting their advice. On Flanagan South, we were even more transparent than we’ve been in the past, in terms of sharing our plans.
It’s always important to ensure good alignment between companies and communities, in terms of economic benefits, and I think that worked very well on Flanagan South. If you look at the states we crossed, they’re all very pleased with the economic spinoffs that occurred – not just direct investment, but everything that goes with it. The reaction we got back from almost every community was positive.
One very big success on Flanagan South, I would say, was the Native American component, in that we worked very collaboratively to ensure they not only benefited economically, but that they were advising us along the way.
Q: Enbridge completed the Seaway Pipeline Twin/Loop project with Houston-based Enterprise Products Partners, L.P. on a 50/50 joint venture basis. How were the two companies able to work together, and focus on their respective strengths and capabilities, to bring this expansion project online?
Al Monaco: A key element in the last leg of this pathway was developing that partnership with Enterprise. It was a good example of a successful Canadian company and a major U.S. player really coming together to connect the upstream and downstream portions of this vision.
We brought a couple of major elements to the table – we had access to heavy crude in Western Canada, and we had the scale to get the crude into that U.S. Midwest-PADD II market efficiently. Enterprise had the initial position in Seaway, and an understanding of the logistical aspects of getting crude from Seaway to all the Gulf Coast refineries.
