Enbridge Energy Partners LP ( EEP ) has drawn up a $145 million investment plan to enhance its facility at North Dakota. Per the plan, the partnership will expand its crude oil capacity and add a rail car loading facility to absorb additional volume.
The pipeline operator will augment the holding capacity at the Berthold terminal by 80,000 barrels per day. The other plan includes a double-loop unit-train facility, oil tanks and other terminal facilities next to its existing facilities.
Enbridge Energy has contracted 70% of the rail loading capacity and expects to settle deals for the remaining capacity at the earliest. According to management, the project incorporates high quality Bakken crude into Enbridge's growing portfolio of pipeline projects that has access to premium markets across the U.S.
The Berthold rail project accompanies a string of expansion ventures that Enbridge Energy has embarked on to expand transport capacity from North Dakota. The expansion will help in absorbing the rising production from Bakken and Three Forks crude oil formations in the northern U.S. and southern Canada.
Moreover, the project, which is expected to be commissioned by 2013, does not hinder the growth plans of producers and shippers, while Enbridge Energy builds up the next phase of pipeline expansions on the Enbridge North Dakota System.
This development should also help Enbridge Energy in reaping benefits from the boom in oil production in the region. Enbridge Energy Co. Inc., a subsidiary of Canada-based Enbridge Inc. ( ENB ), has a 24% holding in Enbridge Energy Partners, while Enbridge Energy Management LLC ( EEQ ) manages its business with a 14% stake in the partnership.
Enbridge Energy holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain a Neutral rating on the company.