In the midst of protests across North Dakota and Iowa in recent weeks, Energy Transfer Partners (ETP) and Sunoco Logistics (SXL) announced an agreement to sell 36.76% of the Bakken Pipeline Project, according to Iowa’s Chronicle Times on August 31. The two companies have agreed to sell their shares to MarEn Bakken Company LLC, jointly owned by Marathon Petroleum Corporation and Enbridge Energy Partners. Enbridge is already involved in several pipeline projects across the U.S. and Canada. You can read Energy Transfer’s press release here.
According to press release, upon closing, ownership in the Bakken Pipeline Project will be as follows: ETP/SXL – 38.25%, MarEn 36.75% and subsidiaries of Phillips 66 (PSX) – 25%. ETP continues to oversee construction of the pipeline, which is expected to be ready for service at the end of this year. Once in operation, Sunoco will be the operator.
Marathon and Enbridge paid $2 billion for the minority share of the Dakota Access Pipeline (DAPL) and its sister pipeline, the Energy Transfer Crude Oil Pipeline. The DAPL will bring Bakken crude oil from western North Dakota through South Dakota and Iowa to Patoka, Illinois. Once the oil hits Patoka, it will be transferred to the ETCOP, which travels from there to Nederland, Texas.
Currently, oil travels mostly by rail from Western North Dakota, but the DAPL is scheduled to move 470,000 barrels of crude per day. Currently, North Dakota produces over a million barrels a day, so over half of that crude will still move by rail. In recent years, increased rail traffic has caused congestion on the tracks, causing shipping difficulties for other industries, including agriculture. In addition, rail accidents, such as the one near Casselton in December 2013 and the crash near Heimdal May 2015, have many citizens concerned about the manner in which crude oil is transported. Pipeline transport is considered safer and more economical than crude-by-rail.
Yet construction of the DAPL has prompted protests both in Iowa and North Dakota, from landowners as well as citizens who are concerned that pipeline leaks and spills could harm drinking water and pose other environmental risks. Advocates for the DAPL insist that the pipeline is constructed under the highest standards, and environmentalists should be more concerned about aging pipelines than new ones.
For more stats and information on crude-by-rail and the Energy Transfer pipeline sale, read the Chronicle Times entire story here.