Enbridge delays Texas oil pipeline for tanker plan

By Jeffrey Jones

CALGARY, Alberta, July 9 (Reuters) - Enbridge Inc (ENB.TO) has pushed back plans for a major pipeline to transport Canadian crude to the U.S. Gulf Coast in favor of an interim scheme to ship it by tanker down the Atlantic seaboard, an executive said on Wednesday.

The shift is partly in response to a newly tempered outlook for production from Canadian oil sands projects, which have been buffeted by regulatory delays and rising costs, Enbridge Vice-President Al Monaco said.

The C$350 million ($346 million) interim plan, called Trailbreaker, would move 230,000 barrels a day, giving Canadian producers access to the Gulf Coast -- the biggest U.S. refining market -- around mid-2010, before Enbridge proceeds with its larger Texas Access pipeline.

"We can get this project on very quickly, and that's its primary advantage," Monaco told reporters after speaking to an oil sands conference.

Under the plan, Enbridge, operator of the main artery for Canadian crude shipments to the U.S. Midwest, would require two pipelines to reverse the direction in which the crude flows.

The first is its pipeline between Sarnia, Ontario, and Montreal. The reversal would give Quebec refiners, including Petro-Canada (PCA.TO) and Royal Dutch Shell Plc (RDSa.L), new access to Western Canadian crude.

The project would also require reversing the flow of a line that runs to Montreal from Portland, Maine.

At Portland, crude could be loaded onto tankers and shipped to the U.S. Gulf Coast, a region identified as the next big market for Canada's oil sands-derived crude.