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Enterprise and Enbridge to proceed with Seaway and Flanagan South oil pipeline extensions; enhanced capacity for Canadian and Bakken crude to Gulf Coast
27 March 2012
|The new extensions will provide enhanced capacity to carry Canadian and Bakken crude to the US Gulf Coast. Source: Enbridge. Click to enlarge.|
Enbridge Inc. and Enterprise Products Partners L.P. have secured capacity commitments from shippers to proceed with construction of a 512-mile, 30-inch diameter twin (a parallel line) along the route of the Seaway Pipeline, adding 450,000 bpd of capacity to the existing system (for a total 850,000 bpd). (Earlier post.) The expansion of the reversed Seaway Pipeline will more than double its capacity to 850,000 barrels per day (bpd) by mid-2014 and transport oil originating in the Canadian oil sands and the US Bakken shale from Cushing, Oklahoma to the US Gulf Coast at Houston, with an extension to Port Arthur/Beaumont.
Enbridge also announced plans to proceed with an expansion of its Flanagan South Project. The Flanagan South Pipeline from Flanagan, Illinois to Cushing, Oklahoma will be upsized to a 36-inch diameter line with an initial capacity of 585,000 barrels per day (bpd). The Flanagan South Pipeline will be constructed along the route of Enbridge’s existing Spearhead Pipeline between the Flanagan Terminal, southeast of Chicago, to Enbridge’s Cushing Terminal in Oklahoma. Flanagan connects to the Enbridge pipeline system reaching up to Edmonton, Canada.
The total estimated cost of the Flanagan South Pipeline project, as a result of the larger capacity and pipeline size, has increased from the original $1.9 billion to $2.8 billion. In addition, the Enbridge share of the cost of the Seaway Pipeline twin line and extension is expected to be approximately $1.0 billion.
Enbridge’s Gulf Coast Access projects give Bakken and western Canadian producers timely, economical and reliable options to deliver a variety of crudes to refinery hubs throughout the heart of North America and now as far as the Gulf Coast. The upsized new Flanagan South Pipeline, combined with our existing Spearhead Pipeline System, will offer shippers 775,000 bpd of capacity from Flanagan to Cushing, with the Seaway Pipeline System reversal and expansion offering capacity of 850,000 bpd from Cushing to the Gulf Coast. The commitments secured in these open seasons will support additional infrastructure to meet the growing transportation needs of these producers and the US Gulf Coast refiners.—Patrick D. Daniel, CEO, Enbridge Inc.
|Enbridge mainline system. Source: Enbridge. Click to enlarge.|
TransCanada’s proposed Gulf Coast Project—the Cushing-to-Gulf portion of the original Keystone XL project (earlier post)—as originally scoped would provide up to 830,000 bpd capacity from Cushing to the Gulf.
The additional commitments obtained for the Seaway Pipeline System include five and 10-year commitments for volumes originating at Cushing, Oklahoma and 10, 15 and 20-year commitments for volumes originating at Flanagan, Illinois and transiting to the Seaway System via Enbridge’s Flanagan South Pipeline.
Substantially all of the initial capacity of the Seaway System has been contracted for these terms. Enterprise and Enbridge are nearing completion of the first phase of the reversal of the Seaway Pipeline, which will provide 150,000 bpd of southbound takeaway capacity from Cushing to the Gulf Coast by 1 June 2012. Following pump station additions and modifications, which are expected to be completed by the first quarter 2013, capacity would increase to 400,000 bpd, assuming a mix of light and heavy grades of crude oil.
The Seaway partners previously announced construction of a new 85-mile 30-inch diameter pipeline that will be built from Enterprise’s ECHO crude oil terminal southeast of Houston to the Port Arthur/Beaumont, Texas refining center, which will give shippers access to heavy oil refineries on the Gulf Coast. Service on the pipeline to Port Arthur/Beaumont is expected to begin in early 2014. A separate open season for the ECHO to Port Arthur leg is underway and due to end 13 April 2012. This open season is offering interested shippers 200,000 bpd of incremental capacity over and above the volumes already subscribed to as part of the Seaway reversal project.
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