Enbridge sees strong demand for Flanagan South pipeline expansion.

Enbridge's Flanagan South pipeline expansion has seen strong demand from shippers, with the commercial process oversubscribed. The company is nearing a final investment decision (FID) for the project, which aims to increase oil transport capacity from Canada to the U.S. Gulf Coast. Enbridge's experience with Flanagan South is expected to inform its decision-making process for future pipeline expansions in the region.

Canadian pipeline operator Enbridge (ENB.TO) has reported strong demand for additional oil transport capacity from Canada to the U.S. Gulf Coast, with its recent commercial process for the Flanagan South pipeline expansion oversubscribed. This indicates a robust appetite for increased pipeline capacity in the region.

The success of the Flanagan South open season brings Enbridge closer to formally sanctioning its proposed expansion of the Mainline network. CEO Greg Ebel stated that the company plans to make a final investment decision (FID) on the first phase of the project, which would add 150,000 barrels of capacity to the Mainline system, by the end of 2025 [1].

The Mainline system, which is the largest in North America, currently has a capacity of 3 million barrels per day. The Flanagan South pipeline, a 954-km connector running from Illinois to Cushing, Oklahoma, is a critical part of this network. The recent demand for capacity expansion reflects the increasing need for oil transport from Western Canada to markets in Eastern Canada and the U.S. Midwest [2].

Enbridge's Mainline system has been in apportionment, a state where demand exceeds available pipeline capacity, for six of the first eight months of 2025. This trend underscores the growing pressure on the existing infrastructure and the need for capacity expansion [1].

The demand for additional pipeline capacity is driven by several factors, including exemptions from tariffs on Canadian oil shipments to the U.S. and the rising output from Canada's oil sands. According to S&P Global, Canada's oil sands are expected to produce 3.8 million barrels per day (bpd) by 2030, a 15% increase from current levels [1].

Enbridge's financial performance also supports its expansion plans. The company reported an adjusted profit of 65 Canadian cents per share for the quarter ended June 30, beating analysts' average expectation of 57 Canadian cents. Quarterly net income rose to C$2.18 billion, while distributable cash flow remained little changed from the year-earlier quarter [2].

The company's experience with the Flanagan South pipeline expansion is expected to inform its future decisions on pipeline expansions in the region. Enbridge's ability to secure strong demand for additional capacity suggests that the market is poised for continued growth in oil transport infrastructure.

References:
[1] https://www.reuters.com/business/energy/enbridge-sees-strong-demand-more-oil-pipeline-capacity-canada-us-gulf-2025-08-01/
[2] https://seekingalpha.com/news/4476723-enbridge-nears-flanagan-south-fid-sees-strong-demand-for-more-canada-to-us-pipeline-capacity