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Enbridge buys into Dakota Access pipeline, Sandpiper future unclear

Hundreds of miles of pipe sit in storage in Newton, Iowa, as photographed on Wednesday, October 14, 2015. Energy Transfer Partners is in the process of securing land for its pipeline project and preparing to build the Dakota Access piple. (Andy Abeyta/The Cedar Rapids Gazette)

Enbridge and Marathon Petroleum announced this week plans to acquire a portion of the Dakota Access Pipeline in a deal that would leave Enbridge’s Sandpiper Pipeline without a major customer.

Enbridge Energy Partners and Marathon Petroleum Corp. have entered into a joint venture to purchase a minority percent interest in the Dakota Access Pipeline and the Energy Transfer Crude Pipeline, which are expected to be complete later this year and would transport crude from the Bakken to Midwest refineries and on to the Gulf Coast.

Upon closing of the $2 billion deal, expected in the third quarter of this year, Marathon Petroleum would terminate its commitment to be the anchor shipper to Enbridge’s Sandpiper project, which has faced numerous regulatory delays in Minnesota.

At that time, Enbridge said in a statement it plans to evaluate the scope and timing of the Sandpiper project to ensure that it’s positioned to meet the growing need for pipeline capacity.

“We continue to believe that the Bakken is highly productive and a significant area of potential that requires pipeline capacity,” said Katie Haarsager, an Enbridge spokeswoman. “We’re still looking at the Sandpiper as a viable solution for moving Bakken crude.”

Marathon Petroleum announced in 2013 that it would fund 37.5 percent of the construction of the Sandpiper project, which is proposed to carry crude oil from northwest North Dakota to Superior, Wis. At the time, the Sandpiper was expected to be in operation in early 2016, but regulatory delays in Minnesota have prevented construction from starting.

Meanwhile, construction for the Dakota Access Pipeline is well underway and will transport crude oil from the Bakken to Patoka, Ill. The pipeline will initially transport 470,000 barrels per day with potential to be expanded to 570,000 barrels per day.

Enbridge would not play a role in the construction or management of the pipeline, Haarsager said.

Construction is also underway on the Energy Transfer Crude Pipeline, which is a converted natural gas pipeline that will transport crude oil from Patoka to the Gulf Coast.

The Dakota Access and Energy Transfer Crude pipelines are jointly referred to as the Bakken Pipeline System.

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