(IBTimes) - Marathon Petroleum Corp. (
) studying pipeline reversal
EPD, ENB, PAA, RDS-A
Marathon Petroleum Corp. is exploring the possibility of
reversing a major pipeline to bring Crude Oil from the US Midwest
to the Gulf Coast refining belt.
Changing direction of the 1.2-M BPD Capline pipeline would be
the 2nd major pipeline reversal that could transport a glut of
Crude Oil in the Midwest to the Gulf Coast, where it can be
refined into petroleum products like gasoline and/or easily
Enbridge Inc. (
) and Enterprise Products Partners (
) plan to reverse the 150-K BPD Seaway pipeline within a month
and expand its capacity to 400,000 BPD by Y 2013.
Marathon is part owner of Capline, which currently brings
Crude Oil from Louisiana to Illinois. The pipeline has been
little utilized as Crude from Canadian Oil Sands and US Midwest
shale formations pour into the Crude Oil storage hub in Cushing,
OK., where there are few ways to move the Crude Oil out of the
Plains All American Pipeline (
) is the majority owner, while Royal Dutch Shell (NYSE:RDS-A)
operates the 630-mile pipeline.
"We are evaluating it now," said Mike Palmer, Marathon
Petroleum's senior vice president of supply, distribution and
planning, about a possible Capline reversal. He spoke in a
conference call with investors. "We're looking into alternatives
to that asset as well as other assets."
A Plains All American representative was not immediately
available. A Shell spokeswoman referred questions to the Capline
Marathon Chief Executive Gary Heminger sounded cautious about
reversing Capline, which brings Crude Oil to the company's 212-K
BPD refinery in Kentucky. The Midwest needs a source of Gulf
Coast Crude to feed refineries, Mr. Heminger said.
But with Capline running at such low rates, it might make more
sense to use it to ship heavy Crude Oil from Canada or light,
sweet Crude from the US Midwest to Gulf Coast refiners, said an
"It might make some sense economically, particularly if the
pipeline is currently handling low volumes," Mr. Evans said.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red
Roadmaster's Technical Report on the US Major Market Indices, a
weekly, highly-regarded financial market letter, read by opinion
makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and
stock markets since 1984, following a successful business career
that included investment banking, and market and business
analysis. He is a specialist in equities/commodities, and an
accomplished chart reader who advises technicians with regard to
Major Indices Resistance/Support Levels.
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