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HOUSTON, Jan 29 (Reuters) - Marathon Petroleum Corp, Valero Energy Corp and Phillips 66, the three largest U.S. independent refiners, reported quarterly results on Wednesday that topped Wall Street estimates as cheaper crude prices on the Gulf Coast helped profits.
Startups of multiple pipelines in Texas throughout 2013 increasingly brought cheaper inland U.S. crudes to Gulf Coast refineries, replacing more expensive imports and alleviating bottlenecks in the Midwest.
Seaway is one such project, involving the reversal of an existing pipeline to deliver 400,000 barrels per day from the Cushing oil storage hub to the Gulf Coast. The pipeline, owned by Enterprise Product Partners and Canada's Enbridge Inc began operations in May 2012, was expanded in January 2013 with a new twin line with capacity of 450,000 bpd planned to start up in the second quarter.
Seaway was the only major artery from the bloated U.S. crude futures hub in Cushing, Oklahoma, to the Gulf Coast, until last week when TransCanada Corp opened its 700,000 bpd Gulf Coast pipeline - the southern leg of the controversial Keystone XL pipeline.
The new infrastructure - built in large part to handle surging output of unconventional North American crudes - has benefited plants on the Gulf Coast, which has more than 40 percent of U.S. refining capacity.
Many of those refineries have ramped up exports of fuels to Latin America and Europe. Phillips 66 said its refined product exports totaled 197,000 barrels per day in the fourth quarter, a 32 percent rise on the year.
"Gulf Coast refiners are the best positioned to benefit from price-advantaged North American crudes and the global refined product market," Roger Read, a refining analyst at Wells Fargo, told clients on Wednesday.
The new infrastructure last year eased Gulf Coast crude prices, cutting costs for refiners. Gulf Coast crude benchmark Light Louisiana Sweet, which had traded at an average $1-a-barrel premium to international Brent for most of last year, fell abruptly to a steep discount in the fourth quarter - further discouraging imports.
The cost benefit was similar to the advantage held by Midwest refiners in recent years, as the Cushing glut pushed West Texas Intermediate (WTI) crude prices to sharp discounts to Brent and other global crudes.
Valero Energy's fourth quarter profit was lifted by a $325 million gain on the sale of its interest in retail business CST Brands Inc. Excluding items, the San Antonio company had a profit of $1.78 per share. Analysts on average had expected a profit of $1.66 per share.
Marathon Petroleum, which operates large plants in Garyville, Louisiana and Texas City, Texas, also had a profit that surpassed expectations, but maintenance costs contributed to a lower quarter profit.
For the fourth quarter, Marathon reported net income of $626 million, or $2.07 per share, compared with $755 million, or $2.24 per share, in the year-ago period. Excluding items, Marathon had a profit of $2.10 per share, a figure that handily beat analysts average estimate of $1.15 per share, according to Thomson Reuters I/B/E/S.
Houston-based Phillips 66 had a quarterly profit of $826 million, or $1.37 per share, compared with $708 million, or $1.11 per share in the same quarter a year earlier. Adjusting for certain items, Phillips 66 had a per share profit of $1.34. Analysts on average had expected a profit of $1.10 per share, according to Thomson Reuters I/B/E/S.