With low-cost, established Canadian heavy oil preferred by Gulf Coast refineries, Mainline Optimization plans move forward
They’ve already got a menu favorite.
And there’s plenty of room on their plate, so to speak.
For years, the heavy oil of choice for U.S. Gulf Coast refineries has come from Canada.
And Enbridge leadership, whose company operates a full-path pipeline solution to deliver Canadian product to Beaumont/Port Arthur, TX, does not expect those tastes to change in the wake of recent U.S. military intervention in Venezuela that could introduce new barrels internationally.
“The U.S. Gulf Coast is the world’s best heavy refining market, and Canadian crude is a meat-and-potato part of the diet there,” Colin Gruending, Enbridge’s Executive Vice President and President of our Liquids Pipelines business, told reporters on Feb. 13 during Enbridge’s 2025 fourth-quarter and year-end financial earnings call.
“And remember . . . that there is probably another 400,000 barrels a day of U.S. Gulf Coast heavy refining capability on top of what’s being utilized today,” added Mr. Gruending.
Enbridge’s MLO1, MLO2 moving ahead
In recent months, Enbridge has sanctioned Phase 1, and is preparing for Phase 2, of our Mainline Optimization Program—an initiative that could move an extra 400,000 bpd of growing Canadian production to American refineries.
Those phases, a.k.a. MLO1 and MLO2, are moving forward with a full head of steam regardless of Venezuela, Enbridge President and CEO Greg Ebel said Feb. 13.
"The U.S. Gulf Coast is the world’s best heavy refining market, and Canadian crude is a meat-and-potato part of the diet there."
Colin Gruending
Enbridge Executive Vice President
and President, Liquids Pipelines
“The Venezuela piece is a supplement to Canadian heavies, not a replacement,” Mr. Ebel told reporters.
“Given Enbridge's unique asset footprint and our expectation that the low-cost, established (Western Canada Sedimentary Basin) production and demand continues to grow, we do not expect any material impact from the recent geopolitical events involving Venezuela.”
Venezuela: Long-term outlook uncertain
Analysts believe the long-term outlook is uncertain for a potential revival of the Venezuelan oil industry.
After seeing two waves of Venezuelan oil industry nationalization, most recently in 2007, multinational producers are viewing any long-term rebuild with caution. And after decades of infrastructure deterioration, any meaningful production growth in Venezuela will require a large capital infusion.
Meanwhile, Enbridge’s Mainline system, which moves an average of 3.1 million barrels a day, has been apportioned—that is, full and oversubscribed—for all but three of the past 12 months.
Leveraging ‘existing assets in the ground’
Enbridge’s MLO1 will add an extra 150,000 bpd of takeaway capacity for producers starting in 2027 through increased use of drag-reducing agents, new piping configurations and crossovers, additional storage capacity and terminal improvements.
MLO2 is expected to add another 250,000 bpd of transportation capacity as early as the end of 2028 through a further suite of upgrades, as well as reversal of Enbridge’s Line 26 that currently travels from Berthold, ND to Cromer, MB.
Beyond the MLO program, we’re also planning a 30,000-bpd expansion of our Express-Platte system to get more Canadian barrels to market.
“Customers remain very interested in moving this project ahead, and it showcases the benefit of existing assets in the ground, as this project leverages underutilized capacity on assets such as Line 26 and Dakota Access,” said Mr. Ebel, referring to MLO2, on Feb. 13.
