8-K

ENBRIDGE INC 8-K Report (Jul 3, 2012)

Filed July 3, 2012For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed a Form 6-K on July 3, 2012, incorporating several press releases from June 2012. A key development announced was the first southbound delivery of crude oil through the Seaway Pipeline on June 6, 2012, a joint venture with Enterprise Products Partners. This marks a significant step in providing producers access to the Texas Gulf Coast refining complex, with initial capacity at 150,000 barrels per day (BPD) and plans to expand to 400,000 BPD by Q1 2013. This initiative is crucial for addressing oversupply in the Cushing hub. In addition to the Seaway Pipeline progress, Enbridge announced the closing of a $400.2 million common equity offering on June 8, 2012. The proceeds are earmarked for expansion projects in Eastern Canada and the US, debt repayment, subsidiary investments, and general corporate purposes. The filing also disclosed an oil release at Enbridge's Elk Point pumping station on Line 19 in Alberta on June 18, 2012. While largely contained and addressed promptly, the incident led to a temporary shutdown and investigation by the Energy Resources Conservation Board (ERCB).

Key Highlights

  • 1First southbound crude oil delivery via the Seaway Pipeline occurred on June 6, 2012, connecting Cushing, Oklahoma to the Texas Gulf Coast.
  • 2The Seaway Pipeline currently has a capacity of 150,000 BPD, with plans to expand to 400,000 BPD by Q1 2013.
  • 3Enbridge closed a $400.2 million common equity offering on June 8, 2012, to fund expansion projects, repay debt, and for general corporate purposes.
  • 4An oil release occurred at Enbridge's Elk Point pump station (Line 19) in Alberta on June 18, 2012, estimated at 1,400 barrels.
  • 5The Elk Point pipeline was shut down following the release and temporarily restarted, but then shut down again by the ERCB for investigation.
  • 6The company provided updates on its significant role as a North American energy transporter, distributor, and growing generator of energy, highlighting its sustainability efforts.

Frequently Asked Questions

The first southbound delivery of crude oil through the Seaway Pipeline on June 6, 2012, is a major development for Enbridge and the industry. It provides a critical new outlet for crude oil from the oversupplied Cushing, Oklahoma hub, directing it to the Texas Gulf Coast refineries, thus potentially improving price differentials and providing greater market access for producers. The planned capacity expansion to 400,000 BPD by early 2013 further underscores its strategic importance.

Enbridge closed a $400.2 million common equity offering. The funds are intended to finance recently announced expansion projects in Eastern Canada and the United States, repay existing indebtedness, make investments in its subsidiaries, and for general corporate purposes. This indicates a focus on growth and financial strengthening.

On June 18, 2012, Enbridge confirmed an oil release at its Elk Point pumping station on Line 19 in Alberta. The release, estimated at approximately 1,400 barrels, was largely contained within the facility site. The pipeline was shut down for safety and clean-up, and regulatory authorities (ERCB) became involved, leading to a temporary shutdown for investigation.

While the release occurred, the pipeline was shut down, and containment and clean-up operations began immediately. The line was restarted after isolation of the affected pump station. However, the Energy Resources Conservation Board (ERCB) ordered a further shutdown for investigation, indicating that the restart of that specific line segment was contingent on regulatory approval and the completion of the investigation.