The astonishing growth of the US oil and gas market has been a sight to behold for the energy industry insiders. While the North American gas and oil market has been revived thanks to a new directive issued by the current administration in the US, a new project may be on the cards that will boost the flow of natural gas in the Dakota Access Pipeline as the operators move one step closer to a final investment decision.
Two North American energy majors outline plans to increase crude oil flow from Canada
The remarkable growth of the North American oil and gas market has led to several new pipeline projects either being planned or having already begun operations. The US has been developing a welcoming environment for energy companies to expand operations and boost production capacity in the North American gas and oil market.
Enbridge, a Canadian energy company with vast assets in the North American market, and Energy Transfer, a major Texas-based energy utility, have outlined plans for a new project that will move vast amounts of Canadian crude through the Dakota Access Pipeline in the Bakken. According to insiders, the project may involve reversing the flow in the DAPL, which has become a major driver for growth in the market.
Details are slim on the company’s plans, but expectations are positive
With no clear and present plans in place, and both companies keeping their cards close to their chests on any details, speculation is the only means to determine what the plan might entail. If the initiative is undertaken, it would add 250 Mb/d of capacity to the DAPL system. Energy Transfer holds a 38.2% interest in the DAPL, while Enbridge holds 27.6%.
Notably, both companies said they would need to gauge the market to assess the viability of the project before even considering taking a final investment decision, which, according to market analysts, may be reached by mid-2026.
Enbridge already operates several pipelines in the region
Enbridge has the Bakken pipeline that is already operational, and according to experts, the most cost-effective plan would be to reverse the Enbridge Bakken Line flow to enable the Canadian crude to flow to the DAPL. The Enbridge line currently moves light-sweet Bakken volumes from Minot County in North Dakota, to Cromer in Manitoba, where it moves onwards to connects to the mainline.
The concept is not a new one, as Enbridge has reversed the flow on the pipeline in the past. Although the DAPL and the Enbridge line do not connect, they are a mere 50 miles apart, meaning new infrastructure construction would be minimal to connect the two lines.
To accommodate both light-sweet Bakken crude as well as heavy-sour Canadian crude, the Dakota Access Pipeline may need to be operated in phases. As new pipelines in the Permian basin are being planned for the new year, Enbridge and Energy Transfer are hoping to gain more market share in the North American market in the new year, and the DAPL plan might just be the only way to do it.
Several new pipelines are being planned to boost the already dominant US gas market
The plan for the Enbridge and Energy Transfer DAPL development reflects the astonishing growth and domination of the North American gas market on the global stage. The US has become the number one producer of natural gas by capacity in the world. Even Alaska has plans to construct new pipelines for oil and gas in the near future. The reality of the current market is that the gas and oil sector is set to continue to dominate the global energy sector, for the time being at least.
