- Enbridge (TSX:ENB) will build, own and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for BP’s Kaskida project
- Kaskida houses a discovered recoverable resource estimate of 275 million barrels of oil equivalent
- Enbridge serves millions of customers through its North American natural gas, oil and renewable power networks and its growing European offshore wind portfolio
- Enbridge stock is up by 27.03 per cent year-over-year, but has added only 18.67 per cent since 2019
Enbridge (TSX:ENB) will build, own and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for BP’s Kaskida project.
Kaskida boasts a discovered recoverable resource estimate of 275 million barrels of oil equivalent and will feature a new floating production platform capable of generating 80,000 barrels of crude oil per day. The project opens the door for BP to develop approximately 10 billion barrels of discovered resources in place in the surrounding Gulf of Mexico Paleogene.
Enbridge will build the 200,000 barrels-per-day Canyon Oil Pipeline System from the Keathley Canyon area to the Green Canyon 19 platform operated by Shell for delivery to the Louisiana market.
It will also break ground on the Canyon Gathering System natural gas pipeline, which will have a capacity of 125 million cubic feet per day and connect subsea to Enbridge’s existing Magnolia Gas Gathering Pipeline, continuing from there to its downstream FERC-regulated Garden Banks Gas Pipeline.
Enbridge’s new pipelines will cost about US$700 million to build, according to Thursday’s news release, and are supported by long-term contracts structured to provide utility-like returns and a low-risk profile. Design and procurement work will begin in early 2025 with the pipelines slated to be operational by 2029.
BP has the option to connect potential future production from its Paleogene portfolio into Enbridge’s new pipelines, both of which are being designed to service nearby discoveries.
Leadership insights
“We are extremely pleased to extend an existing relationship with BP and support their new deepwater development,” Cynthia Hansen, Enbridge’s executive vice president and president of gas transmission and midstream, said in a statement. “This opportunity diversifies our Gulf of Mexico offshore business, strengthens our significant natural gas pipeline portfolio and enhances our ability to meet the strategic needs of our customers. The Canyon oil and gas pipelines offer an attractive opportunity for Enbridge to serve customers in the Gulf of Mexico and further expand our U.S. Gulf Coast footprint. The agreements generate stable and predictable cash flow and provide future growth opportunities.”
About Enbridge
Enbridge serves millions of customers through its North American natural gas, oil and renewable power networks and its growing European offshore wind portfolio. The energy company has been operating conventional energy infrastructure for more than a century and brings two decades of experience in renewable power.
Enbridge stock (TSX:ENB) is down by 0.79 per cent, trading at C$54.98 per share as of 10:08 am ET. The stock is up by 27.03 per cent year-over-year, but has added only 18.67 per cent since 2019.
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(Top image of Enbridge’s offshore assets: CNW Group and Enbridge)
