Independent oil refiner and marketer
Marathon Petroleum Corporation
) is planning to reverse the Capline pipeline to transport oil
from the Midwest to the Gulf Coast refining belt. The reversal
will help in draining the excess crude oil from increased
drilling in the Midcontinent.
The 1.2 million barrel-a-day Capline pipeline is currently
operated by Shell Pipeline, a subsidiary of
Royal Dutch Shell plc
). Marathon owns 32.6% of the same and at present, the pipeline
delivers crude oil from Louisiana to Illinois.
Marathon is expected to start operating the 630-mile pipeline
from Sep 2013. Other details of the deal are yet to be disclosed
by the company.
This will be the second key pipeline reversal following the
Enterprise Products Partners
) have plans to convert the Seaway pipeline in a month and
increase its capacity to 400,000 barrels a day by 2013.
Findlay, Ohio-based Marathon Petroleum Corporation is a leading
independent refiner, transporter and marketer of petroleum
products. Marathon operates in three segments: Refining and
Marketing, Speedway (Retail), and Pipeline Transportation.
Marathon is the fifth largest domestic refiner with a combined
crude oil processing capacity of approximately 1,193,000 barrels
per day through its portfolio of six refineries.
The stock retains a Zacks Rank #2 (Buy). The company's financial
flexibility and strong balance sheet are real assets in this
highly uncertain economy. A major advantage for the company is
its proprietary access to pipelines, which inhibits lower-cost
competitors from supplying to Marathon Petroleum's key
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