Enbridge, Enterprise expand Gulf Coast pipeline plans
By Bruce Nichols
(Reuters) - Enbridge Inc (ENB.TO: Quote) and Enterprise Products (EPD.N: Quote) are seeking to expand their U.S. Seaway pipeline network in the race to ease a crude oil supply glut in the Midwest by shipping it to the Gulf Coast refining hub.
The companies will be seeking binding commitments from shippers to expand their Seaway pipeline partnership, which will carry crude produced in Canada and North Dakota from Cushing, Oklahoma to Houston, Texas once it is reversed, according to a joint press statement released on Tuesday.
Oil companies are eager to build new lines to get the crude from stockpiles in the Midwest to the giant Gulf Coast refining complex, where they can sell it for a hefty premium.
The Seaway open season will run from January 4 to February 10, 2012.
"Depending on the results of the open season, the Seaway pipeline would be looped or twinned to create additional capacity," the companies said in the release, adding the additional capacity would be determined by shipper interest.
In addition, Enbridge and Enterprise will seek commitments to build an 85-mile (137-km) extension of Seaway to carry crude into the Port Arthur/Beaumont, Texas refining hub, which could be in operation by early 2014.
Enbridge and Enterprise plan to reverse the 500-mile Seaway line in the second quarter of next year, with initial flow rates out of Cushing of 150,000 barrels per day (bpd), rising to up to 400,000 barrels per day by the first quarter of 2013. If all goes according to plan, Seaway will be the first pipeline access from Cushing to the Gulf Coast.
"Leveraging the benefits of the existing Seaway pipeline system, which is expected to be fully contracted, provides shippers with accelerated access to the Gulf Coast refining market," said Michael Creel, President of Enterprise's general partner in the press statement. Continued...