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Olympic, Spearhead, Southern Lights, Feeder & other Pipelines
OLYMPIC PIPELINE
In February 2006, Enbridge acquired a 65% interest in the Olympic Pipeline from BP Pipelines. Olympic is the largest refined products pipeline in the State of Washington, transporting approximately 290,000 bpd of gasoline, diesel and jet fuel. The pipeline system extends approximately 300 miles (480 kilometres) from Blaine, Washington to Portland, Oregon, connecting four Puget Sound refineries to terminals in Washington and Portland. BP is the operator of the pipeline.
Results of Operations
Earnings for the year ended December 31, 2007 were $9.9 million compared with $6.5 million for the year ended December 31, 2006. Higher tolls as well as a full year contribution from Olympic Pipeline resulted in this $3.4 million increase. Tolls are adjusted annually to reflect the estimated cost of service for the year and any over or under collections from prior years.
SPEARHEAD PIPELINE
The Spearhead Pipeline commenced delivery of crude oil from Chicago, Illinois to Cushing, Oklahoma in March 2006. The performance of this 125,000 bpd pipeline has continued to surpass Enbridge's expectations and with the support of shippers, the Spearhead Pipeline Expansion is underway.
Results of Operations
Earnings increased to $10.0 million for the year ended December 31, 2007 compared with $6.3 million for the year ended December 31, 2006. Spearhead Pipeline commenced operations at the beginning of March 2006; therefore, 2007 earnings reflect a full year of operations as well as increased throughput.
SOUTHERN LIGHTS PIPELINE
This pipeline is currently under construction in the United States and received regulatory approval in Canada in the first quarter of 2008. Upon completion, the 180,000 bpd 20-inch diameter Southern Lights Pipeline will transport diluent from Chicago to Edmonton, Alberta.
Results of Operations
The Company is entitled to collect an AEDC in tolls once the pipeline is in service. Earnings for 2007 reflect the AEDC related to construction funding during 2007.
FEEDER PIPELINES AND OTHER
Feeder Pipelines and Other primarily includes the NW System, which transports crude oil from Norman Wells in the Northwest Territories to Zama, Alberta, interests in a number of liquids pipelines in the United States, liquid tankage facilities and business development costs related to Liquids Pipelines activities.
Results of Operations
Earnings in Feeder Pipelines and Other were $3.1 million for the year ended December 31, 2007 compared with $6.3 million for fiscal 2006 and $11.5 million for fiscal 2005. The decrease in earnings over the past two years is primarily due to increased business development costs related to the Company's organic growth projects.