OREANDA-NEWS.  Marathon Petroleum Corporation today announced its agreement to participate in the formation of a joint venture to invest in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects, collectively referred to as the Bakken Pipeline system.

MPC agreed to form a joint venture with Enbridge Energy Partners LP, Inc. (NYSE: EEP), through wholly owned subsidiaries, to acquire a partial equity interest in the Bakken Pipeline system from a subsidiary of Energy Transfer Partners, L.P. (NYSE: ETP) and Sunoco Logistics Partners, L.P. (NYSE: SXL), which owns a 75 percent indirect interest in the Bakken Pipeline system. MPC would own a 25 percent equity interest in the new joint venture with Enbridge. At closing, MPC will own an approximate 9.2 percent indirect interest in the pipeline system in exchange for its investment of $500 million. Under the terms of an open season, MPC also expects its subsidiary to become a committed shipper on the Bakken Pipeline system.

"This system is planned to provide cost-effective access to Bakken crude oil production for the Midwest and Gulf Coast, which will increase MPC's refinery supply flexibility," said Gary R. Heminger, MPC chairman, president and chief executive officer. "In addition, MPC's equity-ownership interest in these major pipelines will make a significant contribution toward the company's plan to grow its midstream logistics business."

The Bakken Pipeline system is currently expected to deliver in excess of 470,000 barrels per day of crude oil from the Bakken/Three Forks production area in North Dakota to the Midwest through Patoka, Illinois, and to the Gulf Coast. The Bakken Pipeline system is expected to be ready for service by the end of 2016.

MPC today also announced that, subject to the closing of the transaction with Energy Transfer and Sunoco, Enbridge and an MPC affiliate have agreed to cancel MPC's transportation services agreement related to the Sandpiper project and liquidate MPC's indirect ownership interest in North Dakota Pipeline Company LLC (North Dakota Pipeline), which would effectively cancel MPC's commitment to fund any further construction costs for that project.

Heminger noted MPC's investment in the Bakken Pipeline system substantially reduces the company's total expected capital investment in North Dakota crude oil-related pipelines.

As of June 30, 2016, MPC has contributed $301 million to fund its share of the construction costs for the Sandpiper pipeline project. The closing of an investment in the Bakken Pipeline system and MPC's resulting exit from the Sandpiper pipeline project would result in an impairment review of the carrying value of MPC's investment in North Dakota Pipeline in the third quarter of 2016 that could result in a charge to impair MPC's investment in the project.

MPC's and Enbridge's joint-venture investment in the Bakken Pipeline system is subject to certain closing conditions, and is expected to close in the third quarter of 2016.