To our unitholders and shareholders:
We are pleased to report that 2006 was a year of excellent performance for both our Liquids and Natural Gas segments. It was also a year of exciting changes and opportunities.
Steve Letwin, left, and Terry McGill observe pipeline construction at the East Texas System Expansion
Stephen J.J. Letwin assumed leadership of the Enbridge worldwide natural gas business and became managing director of the general partner of Enbridge Energy Partners, L.P. while Terrance L McGill was named president. Both Letwin and McGill were elected to the boards of directors for the general partner and Enbridge Energy Management, L.L.C.
Continuing execution of our operational and growth plans contributed to a strong year for the Partnership, which reported total adjusted operating income for 2006 of $331 million, up 34 percent over the prior year. Both our Liquids and Natural Gas segments reported improved results: Adjusted operating income for the Liquids Segment was up 57 percent over 2005, while the Natural Gas Segment reported a 22 percent increase over the same period. Distribution coverage improved in 2006, and our investors realized distributions of $3.70 per unit/share for the year.
We have entered an unprecedented period of system expansions and are investing in future growth — more than $800 million was invested in projects during 2006 and a further $3.5 billion is planned for the next three years.
Construction begins on liquids projects as shippers express support for
additional expansions
Crude oil production in the northern Rockies and adjacent areas and Canada
is increasing as U.S. demand grows for reliable and secure sources of
crude oil. To meet this demand, the Partnership — along with other
Enbridge affiliates — has embarked on an aggressive expansion of our
liquids pipeline systems in North America:
- The Southern Access Program expanding our Lakehead System progressed as pump stations were upgraded upstream of Superior, Wis., and groundbreaking on the new 42-inch pipeline in Wisconsin began in late 2006. This first stage of the Southern Access Expansion, from Superior to Delavan, Wis., will be completed in early 2008 and will add capacity of 190,000 barrels per day (Bpd). The second stage from Delavan to Flanagan, Ill., near Chicago is on schedule for completion early the following year.
- With our Enbridge affiliates, we are moving forward with plans for the Alberta Clipper expansion project from Hardisty, Alberta, Canada, to Superior. In early 2007, shippers expressed their support for this strategic expansion of the liquids mainline system, which initially will add another 450,000 Bpd of capacity into the Midwest refinery market by 2010.
- The 30,000 Bpd expansion of our North Dakota System, initiated in 2006, will be completed in late 2007. This work gradually had increased volumes of Montana and North Dakota crude oil delivered into our Lakehead System and is helping relieve some of the market constraints now faced by crude oil producers in the region.
- We expect to add 11 crude oil tanks totaling 3.9 million barrels of storage capacity to our Cushing terminal in 2007.
back