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Enterprise doubles capacity on Seaway oil pipeline to US Gulf refiners

07.03.2014  | 

The expansion will draw barrels from the nation’s biggest oil-storage hub in Cushing, Oklahoma, where stockpiles have fallen 48% this year to the lowest level in five years.

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By TINA DAVIS and LYNN DOAN
Bloomberg

Enterprise Products and Enbridge said the 512-mile expansion of its Seaway oil pipeline is mechanically complete, more than doubling the system’s capacity to move oil south from the delivery point for West Texas Intermediate futures in Cushing, Oklahoma.

Enterprise looped the existing Seaway line with a parallel pipe, increasing capacity to the Houston area to 850,000 bpd, the companies said in a joint statement.

The expansion will draw barrels from the nation’s biggest oil-storage hub, where stockpiles have fallen 48% this year to the lowest level in five years. New pipelines and expansions, including the southern leg of TransCanada's Keystone XL system, helped eliminate a glut that built at Cushing as oil flooded in from Canada and from shale plays such as North Dakota’s Bakken formation.

The new 30-inch Seaway Loop Pipeline connects to the Jones Creek storage terminal near Freeport, Texas, the companies said in the statement. Jones Creek is connected to Enterprise’s ECHO crude storage facility in Houston by a 65-mile 36-inch line. 

Construction of a 100-mile pipeline from ECHO to Beaumont and Port Arthur is expected to be completed this month, and commissioning of both lines will continue through the third quarter.

Line Reversal

Enterprise, a Houston-based company that operates the Seaway pipeline and co-owns it with Enbridge, reversed the system in May 2012 and expanded its capacity to 400,000 bpd in January 2013. 

As part of the most recent expansion, Enterprise said storage at the ECHO terminal would increase by 900,000 bbl to 6 million.

Crude stockpiles at Cushing slid 1.36 million bbl, or 6.2%, to 20.5 million in the week ended June 27, the lowest level since Nov. 14, 2008, according to US Energy Information Administration data. Supplies on the US Gulf Coast have climbed 19% this year to 204.8 million bbl.



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