Seaway Crude Oil Pipeline Temporarily Constrained, but Major Progress Continues with Pump Stations

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Seaway crude oil pipeline, a joint-venture project between Enterprise Products Partners (NYSE:EPD) (Houston) and Enbridge Incorporated (NYSE:ENB) (Calgary, Canada), is a major endeavor to relieve the bottleneck at Cushing, Oklahoma. By the time the Seaway II pipeline, the 450,000-barrel-per-day (BBL/d) twin of the recently reversed 400,000-BBL/d Seaway I pipeline, is brought online, the system will provide up to 850,000 BBL/d of crude takeaway capacity, depending on the mix of heavy and light crude. In the interim, Enterprise is working on new pump stations for the Seaway II and a 400,000- to 500,000-BBL/d lateral from its Jones Creek terminal to Enterprise's ECHO terminal, which is currently being expanded near Houston.

Currently, only the Seaway I pipeline is operational. Its nameplate capacity is 400,000 BBL/d, but it had its capacity temporarily constrained to 175,000 BBL/d. This constraint was put in place due to unforeseen local utility trouble with a transformer, which caused a temporary shutdown at Jones Creek, as well as a multi-unit turnaround at the nearby Sweeny Refinery, which is owned and operated by Phillips 66 (NYSE:PSX) (Houston). Sweeny Refinery can process up to 187,000 BBL/d of crude, a major portion of Seaway I's capacity. The turnaround at Sweeny is expected to be finished next Monday. The bottleneck at Jones Creek is expected to be further relieved by the completion of the Jones Creek-ECHO lateral in mid-October 2013.

The relief for the Jones Creek bottleneck could not come at a better time, as the Seaway II pipeline has an anticipated online date in February 2014. Between now and then, Enterprise will be constructing seven new pump stations and a new origination station along the Seaway II's path. There is also a plan to place three of the seven new stations into service on the Seaway I while Seaway II is being completed; then, switch them over to Seaway II once it is completed. These three stations are expected to bring Seaway I's capacity up to 480,000 BBL/d for those interim months from September 2013 to February 2014.

Overall, the Seaway system will help to greatly alleviate the Cushing bottleneck. Its newly added relief capacity will keep the overall relief capacity far ahead of new incoming capacity until the completion of the Keystone XL pipeline, owned and operated by TransCanada Corporation (NYSE:TRP) (Calgary), in September 2014.

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