Last week, the Department of State issued a permit for Enbridge Inc. (ENB) to build the US portion of a cross-border pipeline. This project, called Alberta Clipper, will transfer crude oil from the tar sands area of Alberta, Canada to Midwestern US refineries.

However, four environmental organizations have vowed to legally challenge the decision as they argue that the pipeline will bring greenhouse-gas intensive oil sands crude from Canada, thereby contributing to global warming.

The company, together with its 12% owned master limited partnership Enbridge Energy Partners LP (EEP), is developing the $3.2 billion Alberta Clipper project. It involves construction of a 1000 mile, 36-inch diameter, heavy crude oil pipeline from Hardisty, Alberta to Superior, Wisconsin, with an initial capacity of 450,000 barrels per day (Bbl/d), eventually expandable to 800,000 Bbl/d by adding pump and terminal stations.

Following receipt of the permit, Enbridge will immediately begin construction on the US leg of the project (approximately 330 miles of the new pipeline), expected to cost around $1.2 billion. The first part of the project (capacity of 450,000 Bbl/d) is expected to be in service by mid-2010.

Enbridge Inc., a Canadian company, is a leader in energy transportation and distribution in North America. It is also increasingly getting involved in natural gas transmission and midstream businesses. Enbridge owns and operates Canada’s largest natural gas distribution company and provides distribution services in Ontario, Quebec, New Brunswick and New York State. We currently have Neutral recommendation for both Enbridge and Enbridge Energy Partners.

Read the full analyst report on “ENB”
Read the full analyst report on “EEP”
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