Enbridge Sanctions New Offshore Pipelines to Support bp’s Kaskida Development
In a strategic move aimed at enhancing energy infrastructure in the U.S. Gulf of Mexico, Enbridge Inc. has announced plans to build, own, and operate new crude oil and natural gas pipelines to support bp’s Kaskida offshore development. This substantial investment underscores Enbridge’s commitment to expanding its presence in the region, building on its rich history of operating conventional energy infrastructure.
### Key Highlights of the Pipeline Project
1. **Project Overview**: The new pipeline system comprises two major components – the Canyon Oil Pipeline System and the Canyon Gathering System. These pipelines will serve the Kaskida development, a deepwater project operated by bp.
2. **Capacity and Design**: The **Canyon Oil Pipeline System** will use 24-inch and 26-inch pipes, with a capacity of 200,000 barrels per day. This oil pipeline will originate in the Keathley Canyon area and transport crude oil to the Green Canyon 19 platform, operated by Shell, for ultimate delivery to the Louisiana market.
3. **Gas Pipeline**: The **Canyon Gathering System** will be a 12-inch subsea pipeline with the capacity to handle 125 million cubic feet of natural gas per day. This pipeline will connect with Enbridge’s existing Magnolia Gas Gathering Pipeline and then deliver gas to its downstream FERC-regulated Garden Banks Gas Pipeline.
### Economic and Strategic Implications
1. **Investment**: The total cost of these pipeline projects is approximately $700 million. This investment aligns with Enbridge’s low-risk business model, providing utility-like returns and ensuring stable cash flows.
2. **Long-Term Contracts**: The definitive agreements with bp include options for future connections from bp’s emerging Paleogene portfolio. This strategic positioning allows Enbridge to accommodate potential nearby discoveries, securing long-term growth opportunities.
3. **Operational Timeline**: Detailed design and procurement activities are set to begin in early 2025, with the pipelines expected to be operational by 2029.
### Enbridge’s Strategic Expansion
This project represents a significant expansion of Enbridge’s offshore pipeline infrastructure in the Gulf of Mexico. Cynthia Hansen, executive vice president and president of Gas Transmission and Midstream, highlighted that this collaboration extends their relationship with bp and enhances their ability to meet the strategic needs of customers in