Trunkline says no shortage if natgas line converted to oil

NEW YORK, Sept 14 Fri Sep 14, 2012 12:23pm EDT

NEW YORK, Sept 14 (Reuters) - Trunkline, a unit of Energy Transfer Partners rejected end user claims that its planned conversion of a natural gas pipeline to carry crude oil would lead to supply shortages, according to a filing made on Friday with federal regulators.

Energy Transfer Partners is the latest entrant in the race to carry growing amounts of crude from the northern United States and Canada to the U.S. refinery row along the Gulf Coast by converting a natural gas pipeline to carry crude oil.

Earlier in the week, Michigan filed a motion with the Federal Energy Regulatory Commission (FERC) against the conversion.

"Trunkline's natural gas delivery capacity into the state of Michigan will remain the same both before and after the proposed abandonment," the company said in a filing with FERC.

Trunkline also said it has no firm shipper commitment for natural gas at tariff rates.

On July 26, 2012, Trunkline filed an application with FERC to order the abandonment of approximately 770 miles of looped mainline transmission pipeline.

The line currently carries natural gas from Buna, Texas to Tucola, Illinois. The company plans to sell the line, reverse it, and convert it to carry crude oil from various other Midwestern pipelines down to the U.S. Gulf Coast refineries.

There is no indication of the size of the crude line envisioned or a timetable for the conversion.

About 800,000 barrels of crude pipeline capacity is expected to come online in the next year to relieve the glut of crude growing in the Midwest.

A spokeswoman for the company was not available for comment.

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