) - the parent company of
Enbridge Energy Partners L.P.
) - plans to boost the capacity of its Seaway pipeline by the
end of this year, much earlier than the previous forecast.
Seaway Crude Pipeline Company LLC is equally owned by the units
Enterprise Products Partners L.P.
) and Enbridge. The pipeline companies recently completed their
reversal operation of the line, enabling the flow of crude oil from
Oklahoma storage hub to the Gulf Coast refining hub.
Currently, the pipeline has the capacity to transport 150,000
barrels of oil per day (BPD), which was previously expected to
exceed 400,000 BPD in the first quarter of 2013, upon further
alternations as well as improved pumping capabilities. However, the
pipeline companies are on track to expand the line by 250,000 BPD
well before the scheduled time period.
Seaway pipeline is one of the pipeline projects that aimed at
clearing a bottleneck at the pipeline hub. According to the U.S.
Energy Information Administration (EIA), 45 million barrels of
commercial crude oil was stored in the tanks at Cushing as of the
week ended May 11. This represents a 12% increase from the
year-earlier period. The recent boost in domestic oil production as
well as lack of infrastructure to take it out of Cushing had pushed
the U.S. benchmark oil prices approximately $20 below the European
The recent turnaround of the 500-mile, 30-inch diameter line
facilitated North American crude oil producers in transporting more
than 4 million BPD of oil to the U.S. Gulf Coast refineries.
This Seaway system also includes a terminal and distribution
network that originates from Texas City, Texas and serves local
refineries and in the Houston region. It also includes dock
facilities at Freeport and Texas City.
Again, Enbridge also remains concerned about rapid oil
production from the Alberta oil sands and shale oil fields such as
Bakken in North Dakota. Although the company expects the expansion
of its North American pipeline network in 2014 to ease the glut,
the recent boom in North American oil output could constrain the
line as soon as 2016.
Enbridge Inc. - Canada's No. 2 pipeline company - remains
engaged in the transportation and distribution of crude oil and
natural gas primarily in Canada and the U.S.
Enbridge holds a Zacks #3 Rank, which is equivalent to a Hold
rating for a period of one to three months.
ENBRIDGE EGY PT (EEP): Free Stock Analysis
ENBRIDGE INC (ENB): Free Stock Analysis Report
ENTERPRISE PROD (EPD): Free Stock Analysis
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