Incoming Crude Oil Pipeline Capacity Could Lower U.S. Imports by 30%

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Researched by Industrial Info Resources (Sugar Land, Texas)--With the price of U.S. natural gas still suppressed by a supply that is far more abundant than demand, crude oil and liquids have become cash crop resources to take its place. This replacement has led to the conversion and reversal of many pipelines connected to the refinery hub along the Gulf Coast. Along with these conversions and reversals, shippers are building new pipelines to increase Gulf Coast access to Canadian oil sands, as well as the lucrative Eagle Ford and Utica shale plays. This new influx of crude oil, with a total capacity estimated at more than 2.4 million barrels per day (BBL/d) by 2015, is roughly 30% of Industrial Info's tracked Gulf Coast refining capacity.

In 2005, the U.S. imported 12.5 million BBL/d, roughly 60% of its oil, according to estimates from the U.S. Energy Information Administration. That same agency estimates that by 2014, oil imports will fall to 6 million BBL/d, or only about 32% of U.S. oil, a difference of 28%. Comparing that with Industrial Info's data, the numbers match up. Of the incoming crude oil capacity, 200,000 BBL/d is slated to be in-service in mid 2015. Remove that from Industrial Info's figure of 2.4 million BBL/d, and the leftover 2.2 million BBL/d is just about exactly 28% of the total Gulf Coast refining capacity across Louisiana and Texas.

These figures calculated from Industrial Info's database assume a median capacity on some projects set for completion in 2014 that do not have their exact nameplate established yet, so their actual flow rates could mean a 1% shift in either direction. They also assume that all these pipes with nameplate capacities established will be running at full capacity. While this is rarely the case, offshore capacity is also not taken into account. That being said, the actual incoming capacity from those producers may compensate for the discrepancy between actual and nameplate capacities on land-based pipelines.

The largest incoming pipeline is set to be the Gulf Coast pipeline under TransCanada (NYSE:TRP) (Calgary, Alberta), which is slated to deliver 700,000 BBL/d of crude oil to the Gulf Coast by the end of third quarter 2013. The Gulf Coast pipeline will be bringing in crude oil from the bottlenecked terminal in Cushing, Oklahoma, where the controversial Keystone XL pipeline, also a TransCanada project, will later bring in 500,000 BBL/d of Canadian oil sands crude.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.