Enterprise, Enbridge seek shipper commitments for US Seaway pipeline expansion
Enterprise Products and Enbridge say they will hold open seasons from January 4 through February 10, 2012, to solicit capacity commitments from shippers for an expansion of the Seaway pipeline and an extension of the pipeline into the Port Arthur/Beaumont refining market in Texas.
The companies recently announced plans to reverse the flow direction of the 500-mile, 30-inch diameter Seaway crude oil pipeline, enabling it to transport crude oil from the oversupplied hub in Cushing, Oklahoma to the US Gulf coast.
Enbridge on Wednesday said it completed its $1.15 billion acquisition of a 50% stake in the pipeline. ConocoPhillips was the previous owner.
The initial 150,000 bpd of capacity on the reversed system could be available by the second quarter of 2012.
Following pump station additions and modifications, which are expected to be completed by the first quarter of 2013, capacity would increase to 400,000 bpd, assuming a mix of light and heavy grades of crude oil, the companies said.
Shippers who participated in the Wrangler open season have indicated strong support for the Seaway reversal and expansion, according to the companies.
Given the advantages associated with Seaway, Wrangler has been terminated, according to Enterprise.
Depending on the results of this open season, the Seaway pipeline could be looped or twinned to create additional capacity. This new loop would be built at the size and capacity required to meet shipper needs and in a location that generally follows the route of the existing Seaway pipeline, they said.
"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, while an expansion offers incremental capacity in excess of 400,000 barrels per day and could be available in early 2014,” said Michael A. Creel, CEO of Enterprise's general partner.
The new 85-mile pipeline that will be built from Enterprise's ECHO crude oil terminal southeast of Houston to Port Arthur, Texas, will give shippers access to the region's heavy oil refining capabilities.
Service is scheduled to begin in early 2014.
In a separate announcement, Enbridge said it is proceeding with its Gulf Coast Access project, which will transport crude oil from Flanagan, Illinois, south to Cushing via an additional line it will construct, and then to Houston and Port Arthur on the Seaway pipeline system joint venture.
Enbridge will also hold a concurrent second open season to provide the opportunity for shippers to subscribe for additional capacity from Flanagan all the way to the Texas Gulf coast.
"Expansion of the Seaway System, complemented by the addition of capacity on Enbridge's systems from the Chicago area to Cushing, gives both US and Canadian producers new and timely options to reach the Gulf coast," said Patrick D. Daniel, CEO of Enbridge.
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