Enbridge is planning to increase capacity on its Gray Oak Pipeline and expand docking operations in the Corpus Christi, Texas, area as part of its efforts to boost exports of Permian Basin liquids from the busy Gulf Coast port, the company said on Friday.

Enbridge said it plans to add 120,000 b/d of capacity to the 900,000-b/d pipeline and has purchased two docks and land adjacent to the Ingleside Energy Center from Flint Hills Resources for about $200 million.

Company officials said Enbridge recently finished work on four new storage tanks at the Ingleside site, bringing total storage capacity there to 18 million bbl. Enbridge also is planning five more tanks that will add 2.5 million bbl of capacity, Chief Executive Greg Ebel said on a call to discuss the company's first-quarter financial results.

He said the work is intended "to support growing international demand for North American energy exports."

"These strategic investments augment our competitive position in the region and support attractive economics for our customers," he said.

The Canadian company reported adjusted Q1 earnings of C$1.955 billion ($1.433 billion), a 13.3% increase from the same period last year.

It reported strong performance on the company's Mainline pipeline system, where Q1 volumes averaged 3.127 million b/d, up 0.22% year to year.

Ebel said the company expects volumes to remain above 3 million b/d through the remainder of the year.

Colin Gruending, executive vice-president of liquids, said now that Canadian regulators have approved a multi-year rolling plan for the line, Enbridge is in discussion with shippers about expanding capacity.

"You're going to see optimizations continue from us serially here month to month, quarter to quarter and then chunkier expansions in the 100,000 a day category in the next two years," he said.

Gruending said Enbridge has so far seen little impact on volumes from the start of operations on the recently completed Trans Mountain Pipeline expansion project, which now has the capacity to transport 890,000 b/d of crude from Canada's oil sands fields to export terminals on the Pacific Coast.

"We've not really seen a blip on our system here through April or May. And likewise, our downstream pipes remain pretty robust," he said. One reason for this, he said, was a reduction in exports of heavy Mexican crude, which has increased demand in the Gulf Coast region for Canadian heavy crude.

He said that while Enbridge's expansion efforts in Corpus Christi are focused on crude, "Ingleside is kind of a Swiss Army Knife multi-product ambition." Over time, Enbridge could use the docks and facilities for a variety of other products.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Steve Cronin, scronin@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

05-10-24 1308ET