CALGARY, Alberta, Aug. 3 (UPI) -- Canadian energy company Enbridge said it was footing the bulk of the bill to acquire a pipeline system that it said would give it access to the U.S. Gulf Coast.
Enbridge Energy Partners and Marathon Petroleum Corp. said they established a new joint venture to acquire a 49 percent stake in a holding company that owns a 75 percent stake in the Bakken Pipeline system, a system that links the North Dakota oil fields to regional networks.
Mark Maki, a president for the Enbridge unit, said the acquisition gives the venture an opportunity to transport crude oil from the Bakken shale oil field to the U.S. Midwest and the U.S. Gulf Coast.
"This [acquisition] will provide our shippers the ultimate potential to reach the eastern USGC, which has been a strategic priority for us," Enbridge Executive Vice President Guy Jarvis said in a statement.
Enbridge said it put forward $1.5 billion for the acquisition, with Marathon emerging with the remaining $500 million. The Dakota system runs from the Bakken shale area in North Dakota and has a carrying capacity of 470,000 barrels of oil per day.
North Dakota is the No. 2 oil producer in the nation. The rate of growth in the state's Bakken shale reserve basin was more than existing pipeline infrastructure can handle, forcing many in the industry to turn to rail as an alternate transit method.
The state's governor, Jack Dalrymple, said rail traffic may drop off once new pipeline infrastructure comes online. Three pipelines -- Sandpiper, Dakota Access and Upland -- should be in service by 2018 and provide 895,000 barrels per day in new capacity.
Once the acquisition is cleared, Enbridge and Marathon said they'd give up on their options for the Sandpiper pipeline, a project under environmental review.
In June, Enbridge was ordered to replace parts of its regional pipeline systems stemming in part from a federal order related to a 2010 oil spill in Michigan, one of the worst inland incidents of its kind.