The Seaway system, which previously moved crude north from the coast to Oklahoma, is being reversed to ease the supply glut at Cushing, the delivery point for WTI crude futures.
The total cost of the Seaway reversal and expansion is $2 billion, which will be split evenly between Enbridge and Enterprise. Enbridge earlier paid $1.15 billion for ConocoPhillips (COP)’s 50 percent stake in the pipeline. Enbridge will spend $2.8 billion on the Flanagan South pipeline, the company said in a separate release yesterday.
Pump UpgradesEnbridge and Houston-based Enterprise are scheduled to provide 150,000 barrels a day of capacity by June 1. That will rise to 400,000 barrels by 2013 after pump additions and upgrades, the companies said.
The companies may increase the twin line’s capacity beyond 450,000 barrels a day if enough shippers are interested, Rick Rainey, an Enterprise spokesman, said in a telephone interview.
Enbridge already has excess capacity on its mainline system, which runs from Western Canada to Illinois. Combined with the Seaway and Flanagan expansions, Enbridge will be able to ship an additional 500,000 barrels from Canada to the U.S. Gulf Coast, Vern Yu, vice president of business development and asset management at Enbridge, said in a telephone interview.