Enbridge-BP Delivery System

Enbridge Inc. and BP Pipelines (North America) Inc. have entered into an agreement to develop a new delivery system to transport Canadian heavy crude oil from Flanagan, Illinois, to Houston and Texas City, Texas, using a combination of existing facilities and new pipeline construction where required.

The new delivery system is expected to be in service by late 2012 with an initial total system capacity of 250,000 barrels per day (bpd) into the Gulf Coast. Enbridge and BP intend to use the BP #1 System and other existing pipelines north of the Cushing, Oklahoma, crude oil hub with some new pipeline construction south of Cushing, to connect to markets in Houston and possibly Nederland, Texas. Initial receipts at Flanagan, where the system would interconnect with Enbridge Energy Partners' Southern Access pipeline, would be approximately 140,000 bpd with deliveries to Gulf Coast markets. The remaining 110,000 bpd would originate from interconnecting pipelines at Cushing.

The project would be timed to coincide with the projected ramp-up of crude oil production in western Canada. It would be complementary to Enbridge's other market initiatives including the Trailbreaker Project, which is planned to offer Gulf Coast access by tanker from Portland, Maine, by mid-2010; the Southern Access Extension, which is expected to facilitate both heavy and synthetic crude access to Patoka, Illinois, by 2011; and the Texas Access Pipeline, which is positioned to move greater crude oil volumes from Patoka to the Gulf at the time required by the market.

A BP Pipelines affiliate is expected to be a significant committed shipper on the proposed system. Enbridge and BP Pipelines would make capacity available to other potential shippers on terms competitive with other Gulf Coast delivery proposals through commercial arrangements targeted to be concluded this fall. Terms will be subject to approval by applicable regulatory authorities.

The two companies plan to operate the pipeline system by way of a joint venture, subject to completing final agreements and securing other required approvals.