Canadian Energy Giant Buys Share in Bakken Pipeline Project

Meanwhile, Dakota Access files winter construction plans for the project

Kyle1278/Wikimedia Commons

Canadian energy transport giant Enbridge Inc. has reached an agreement to buy a minority equity stake in a pipeline system of Texas-based Energy Transfer Partners LP that includes ETP subsidiary Dakota Access LLC’s Bakken pipeline project, the Calgary, Alberta-based company announced in a news release Tuesday.

ETP and Sunoco Logistics Partners LP — which owns a crude oil terminal in Nederland, Texas, where oil transported by the Bakken pipeline from shales in North Dakota to a hub in Patoka, Illinois, would ultimately end up — have a 75 percent stake in a holding company that owns the Bakken Pipeline System. The system includes Dakota Access’ Bakken pipeline, which would transport crude oil from the Bakken and Three Forks shales in North Dakota through South Dakota and Iowa to a connecting hub in Patoka, Illinois; and another ETP pipeline being converted from transporting natural gas to oil and that would move the Bakken pipeline crude to Sunoco’s Gulf Coast terminal in Nederland.

Under the stated terms of the agreement, Enbridge subsidiary Enbridge Energy Partners LP and Findlay, Ohio-based Marathon Petroleum Corp. would collectively purchase a 49 percent equity stake in ETP’s and Sunoco’s 75 percent share of the pipeline system. (The other 25 percent is owned by Houston-based energy giant Phillips 66.)

A map of Dakota Access and Energy Transfer Crude Oil pipeline routes, which are collectively referred to as the Bakken Pipeline System. Image: Enbridge
A map of Dakota Access and Energy Transfer Crude Oil pipeline routes, which are collectively referred to as the Bakken Pipeline System. Image: Enbridge

Enbridge’s pending, $1.5 billion purchase, which the news release says will likely be completed in the third quarter of this year, may be a sign that it is abandoning another pipeline project it has partnered with Marathon on — an estimated $2.6 billion effort to construct a pipeline from the Bakken shale through Minnesota en route to a terminal in Superior, Wisconsin. (Marathon plans to contribute another $500 million toward the purchase.)

On social media, some pipeline opponents who read the news release renewed speculation that ETP’s plans to transport oil to the Gulf Coast meant that the company will sell it overseas, contrary to some suggestions when the Bakken pipeline project was first announced that it would be used for domestic energy purposes. Dakota Access’ website says that the pipeline will “reduce the current use of rail and truck transportation to move Bakken crude oil to major U.S. markets to support American energy needs”; Vicki Granado, a spokeswoman for Dakota Access, added in an email to the Informer:We do not own the product in the pipeline. We transport products on behalf of producers.”

The involvement of the Canadian Enbridge also drew comparisons to the Keystone XL pipeline project, which was proposed to transport oil from tar sands in Alberta to the U.S. but halted by President Obama after intense opposition from environmentalists concerned about its potential impact on climate change.

Granado said Enbridge’s announcement would have no impact on the Bakken pipeline’s anticipated completion date. Dakota Access has always said that it plans to have the pipeline operational by the end of 2016 and on Tuesday, the company submitted a winter construction plan (embedded below) to the Iowa Utilities Board that the regulatory body will soon review. The plan has already raised concerns from opponents that it’s not specific in addressing the adverse winter weather and from a supportive union that more workers may be necessary to complete the project on deadline.

Gavin Aronsen
Gavin Aronsen is an editor and reporter for and founding member of the Iowa Informer. He previously worked as a city reporter for the Ames Tribune, research assistant to investigative journalist Wayne Barrett at the Village Voice, and in various roles at Mother Jones, where his work contributed to a National Magazine Award nomination for the magazine's digital media coverage of the Occupy Wall Street movement. Email: garonsen [at] iowainformer [dot] com.