The North American energy market has been dominated by the United States for decades, with the substantial energy projects that the American market boasts in regions such as the Permian basin. However, the Canadian energy market has been growing at a steady pace recently, and now, Enbridge, the largest energy pipeline company in North America, has announced the approval of its Southern Illinois Connector, a new crude pipeline that will deliver vast amounts of resources to the North American energy market.
Enbridge is betting big on its new Southern Illinois Connector pipeline
The company noted during its earnings report for the third quarter of the year that it has approved the plan for the Southern Illinois Connector pipeline that will run from Wood River to Patoka, IL. The astonishing 56-mile pipeline will create an extra 100,000 bpd of long-haul, contracted service to the Gulf Coast. Serving the American energy market can prove to be quite a profitable venture, as noted by several large energy companies in the market.
The company has been betting big on its Southern adventure into the market, and has outlined additional plans to increase operations in the North American market on top of the new Southern Illinois Connector pipeline. The global energy market is in a constant state of change, adapting to whatever the market needs to move forward, be it gas, oil, or renewable energy resources.
“We have consistently talked about our southbound playbook . . . the south is where it’s at. Integrated business models. Lots of big, efficient, long-lived refineries that are very competitive. And of course, less competition now from Venezuela and Mexico inbound heavy.” – Colin Gruending EVP and President, Liquids Pipelines
Despite some recent political tension, Canada and the US are still doing business
One week on from Enbridge announcing the new Southern Illinois Connector pipeline, the firm revealed its plan to expand its Express-Platte pipeline system to benefit Canadian producers. And that is not all, the company also has plans to spend up to $1.4-billion as part of phase 1 of its Mainline Optimization initiative, which will add 150,000 bpd of system capacity to its Mainline system.
Enbridge’s ambitions are now reaching new heights as the company has noted its plans to boost operations across its vast energy pipeline system, connecting the Illinois operations to essential processing plants, marking a new future for the company as it aims to remain competitive in a market saturated by exceedingly large energy companies.
Several large energy firms are targeting operations in the South of the US
The energy companies in the US are targeting the South as a potential untapped market that needs exploring, much like Cardinal Midstream’s plans to construct a series of new pipelines linking the Permian basin to Mexico and Texas.
Enbridge’s plans are ambitious, but the company has the required expertise as the largest energy pipeline company in North America, so one would expect the pipeline project to move ahead with no interruptions or pushback from local and regional government.
The project comes as the US and Japan agree on terms to increase investments
In a recent trip to Asia, US President Donald Trump was bathed in praise and gifts from a litany of Asian heads of state, none more important than the meeting between himself and the newly elected Prime Minister of Japan. The pair agreed on terms for a fresh $550 billion investment framework for energy and LNG infrastructure in the United States in exchange for a softening of tariffs. Enbridge will be hoping some of that substantial investment heads their way as they plan to expand their energy pipeline operations in the North American market.
