By EDWARD WELSCH
CALGARY -- The Seaway pipeline reversal designed to help ease the glut in Cushing, Okla., will begin delivering crude oil to Gulf Coast refineries earlier than expected, a spokesman for the project said.
"It is running ahead of schedule, and we expect delivery of crude oil to begin during the later part of May," said Rick Rainey, a spokesman for Enterprise Products of Houston.
The reversal had been expected to start up by June 1.
On Friday, Enterprise said in a document filed with the Federal Energy Regulatory Commission that oil on the pipe would reverse flow southward on or around May 17, though Rainey said actual deliveries to the Gulf Coast could come at a later date.
The Seaway reversal has been highly anticipated by the oil industry because the lack of transportation between the middle US and the Gulf Coast has caused a supply glut and dropping prices for North American oil as production surges from Canada and North Dakota.
The bottleneck is partially responsible for US benchmark oil prices trading about $15/bbl below international prices.
Seaway is joint project between Enterprise Products and Enbridge of Calgary that will move as much as 150,000 bpd this year from the main US oil storage hub of Cushing to refineries on the Gulf coast, and will be expanded to 400,000 bpd early next year.
It is competing with a rival project by TransCanada that could move about 700,000 bpd by mid-2013.
Dow Jones Newswires