Enterprise Products cancels Wrangler pipeline plan
By BEN LEFEBVRE
Enterprise Products said Wednesday it will cancel its Wrangler pipeline project in the US in favor of reversing the Seaway pipeline to bring crude oil from Cushing, Okla. to the Gulf Coast.
Enterprise and Enbridge had been gauging interest in the planned 800,000 bpd Wrangler as a way to move light, sweet crude oil to the Gulf Coast from the storage hub of Cushing, where a bottleneck had led to a glut and depressed prices.
Gulf coast refiners desired the discounted crude, leading to a number of proposed projects to connect the two markets.
Enbridge on Wednesday bought ConocoPhillips’ 50% stake in the Seaway pipeline, of which Enterprise owns the other half.
Enbridge and Enterprise will now focus on reversing Seaway to bring Gulf coast oil to Cushing by early 2012, a move that makes Wrangler redundant, said Enterprise spokesman Rick Rainey.
"For all intents and purposes, this project takes the place of Wrangler," Rainey said.
Enterprise could incorporate its Wrangler proposal into a future project that would add a parallel line to Seaway if enough interest is shown, boosting capacity along the route past 400,000 bpd, Rainey said.
Seaway is able to handle the same crude types as Wrangler would have. But at 800,000 bpd, its sheer size may have been too much for the market to bear in the short term, said Avi Feinberg, analyst at Morningstar.
"Wrangler being as big as it is, I wondered if you need that much capacity," Feinberg said.
Dow Jones Newswires
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