Enbridge and LOOP Join Forces For Proposed Gulf Coast Oil Pipeline

Business Wire, March 23, 1999

CALGARY, Alberta--(BUSINESS WIRE)--March 23, 1999--Enbridge Inc. (Nasdaq:ENBRF)(TSE:ENB)(ME:ENB) of Calgary, Alberta, and LOOP LLC of New Orleans, today announced a proposal to construct a new pipeline in the southern United States to transport crude oil from the eastern Gulf Coast to western Gulf Coast refiners. The pipeline would carry foreign crude supplies from South America, West Africa and the Middle East, and domestic crude produced in the Gulf of Mexico.

Extensive engineering and feasibility studies have been completed on what is currently being called the Alligator Pipeline, and Enbridge and LOOP are now holding discussions with potential shippers. If commitments can be obtained this year, the two companies could begin seeking the necessary regulatory approvals and permits by the end of 1999, for a potential in-service date of late 2001.

The project would involve the construction and operation by Enbridge of a large-diameter, high capacity, batched pipeline system from the St. James, La., pipeline hub to Texas City, near Houston. The system would link crude oil delivered to the LOOP (the Louisiana Offshore Oil Port) to refiners located along the western Gulf Coast.

The proposed pipeline would be 36 inches in diameter, approximately 275 miles long, and have capacity to transport 600,000 barrels per day of crude oil, expandable to 900,000 barrels per day. Refinery capacity along the western Gulf Coast is approximately 3.5 million barrels per day. The current cost estimate to construct the pipeline is approximately US$400 million.

"This is an excellent project for Enbridge," said Brian F. MacNeill, President & Chief Executive Officer of Enbridge Inc. "It extends our geographic reach and brings our 50 years of pipeline and terminaling experience to bear to ensure that growing volumes of offshore crude oil can be delivered to the western Gulf Coast refineries in a cost-effective manner."

The continued decline in domestic United States crude oil production, combined with increasing crude oil volumes from the Gulf of Mexico and South America, is expected to result in saturation of eastern Gulf Coast markets and delivery systems. The proposed pipeline would take advantage of the existing LOOP marine terminal facilities and crude oil storage to move large volumes of crude oil to western Gulf Coast refineries where demand for offshore crude oil, particularly heavy sour oil, is growing.

"This seems to be a project that is right for the times," said Robert C. Thompson, President of LOOP. "The market has shifted dramatically, and we believe the demand is there for this service."

LOOP's marine transfer station and oil port is located in the Gulf of Mexico approximately 20 miles south of Grand Isle, La., in 110 feet of water. The company's offshore oil port is designed to handle the largest ships in the world. Super-tankers carrying up to 4.2 million barrels of crude oil have safely unloaded their cargoes at the Port since 1981. A submarine pipeline moves crude oil to Clovelly, La., where LOOP maintains eight underground salt caverns capable of storing up to 45 million barrels of crude oil. This storage capacity enables LOOP to store large volumes of crude oil before it is delivered to refiners in smaller batches that are more suitable for refinery tanks. The storage facilities are connected to the St. James hub by pipeline.

Enbridge Inc. is a leader in energy transportation, distribution and services. The company operates, in Canada and the United States, the world's longest crude oil and liquids pipeline system. It also is involved in liquids marketing, natural gas transmission and international energy projects, including a crude oil pipeline in Colombia and a crude oil storage and ship-loading terminal in Venezuela. Enbridge employs more than 5,000 people, primarily in Canada, the United States and South America. The company's common shares trade on the Toronto and Montreal stock exchanges in Canada under the symbol "ENB" and on The NASDAQ National Market under the symbol "ENBRF". Information about Enbridge is available on the World Wide Web at http://www.enbridge.com.