A new joint venture between Energy Transfer and Enbridge aims to enhance Canadian crude oil transport to the U.S. Gulf Coast through the Southern Illinois Connector project. Announced through an open season notice, the initiative targets a capacity of 200,000 barrels per day, leveraging existing infrastructure and a new pipeline segment. This collaboration addresses growing industry demand for additional egress options from Western Canada to the Gulf Coast, particularly as Enbridge’s Flanagan South pipeline nears its maximum capacity of approximately 800,000 barrels per day.
The Southern Illinois Connector will connect key Illinois hubs, including Flanagan and Wood River, to the ETCOP pipeline in Patoka, which extends to the Gulf Coast (Figure 1). By reconfiguring and upgrading existing systems, such as Enbridge’s Mainline, Southern Access Extension (65% owned by Enbridge), the project aims to boost available capacity into Patoka hub where barrels would flow down open space on ETCOP to the Gulf. A new pipeline segment from Wood River to Patoka may facilitate additional volumes from Enbridge’s Platte and Express pipelines, though existing pipelines like Keystone could offer untapped capacity for similar routes. This blend of new and existing infrastructure reflects a pragmatic approach to meeting market needs without extensive new construction.
Enbridge’s long-standing strategy of controlling crude from wellhead to market remains central to this project. Historically, the company has maximized revenue by transporting barrels through its wholly owned Mainline and Flanagan South pipelines, capturing significant tolls. With Flanagan South approaching full utilization, Enbridge is increasingly relying on joint ventures, such as the Southern Access Extension, ETCOP, and the Southern Illinois Connector, to maintain its market reach, albeit with a reduced revenue share through partnerships. For Energy Transfer, the project supports efforts to feed underutilized assets, like ETCOP, with crude from the growing Western Canadian basin, diversifying away from the mature and highly competitive Bakken region.
The Southern Illinois Connector faces competition from other Canadian egress projects, notably Trans Mountain’s pump station expansion, which likely offers superior netbacks. However, port congestion risks could undermine Trans Mountain’s appeal. The Southern Illinois Connector’s toll rates, potentially discounted to compete with Flanagan South’s $8.54 per barrel from Western Canada to the Gulf Coast, will be critical to its success.
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