Saskatchewan System

Crude Oil and Liquids Transportation

Enbridge Income Fund has a 100% interest in the Saskatchewan System, which consists of crude oil and liquids pipelines that connect producing fields in southern Saskatchewan and southwestern Manitoba with Enbridge Inc.'s mainline pipeline to the U.S.

The Fund's crude oil and liquids pipelines system in Saskatchewan and Manitoba is expected to provide some of its best opportunities for long-term organic growth due to the system's strategic location in the heart of the Bakken shale formation, which is fast becoming one of North America's most significant sources of oil and gas production growth. The Canadian side of the Bakken, where the Saskatchewan System is located, is estimated to contain at least 1 billion barrels of recoverable oil based on current technology. We expect this resource will grow significantly with advances in drilling and production technology.

In August 2009, we began construction of Phase II of the Saskatchewan System expansion, a $120 million project that will increase crude oil capacity across the system by approximately 125,000 barrels per day and will help reduce capacity constraints at several locations. With a planned in-service date in the fourth quarter of 2010, the expansion will generate significant additional cash flow for the Fund in the near term.

Given the very high potential for further crude oil production growth in this region, we expect that there will be a need for further pipeline capacity in the Bakken. We plan to aggressively pursue any such opportunities and take full advantage of our unique position in this region.