UPDATE 2-Enterprise: Seaway line to ECHO to be done in 2nd half

Thu Jan 31, 2013 1:58pm EST

Related Topics

* Line to Houston Ship Channel terminal hub under
construction
    * Alleviate bottlenecks when finished in 2H 2013


    HOUSTON, Jan 31 (Reuters) - Enterprise Products Partners LP
 expects a new oil pipeline connecting the recently
expanded Seaway Pipeline to Houston refineries to be completed
in the second half of the year, company officials said on
Thursday. 
    The completion of the line should help ease a bottleneck at
the Jones Creek, Texas, terminal, at the end of the Seaway line,
which currently has only two options to take away crude from
storage tanks. 
    Seaway operator Enterprise was forced last week to reduce
throughput on the southern leg of Seaway after the Phillips 66
 247,000 barrels-per-day (bpd) refinery in Sweeny, Texas,
went into maintenance. The link to Sweeny is one of two
pipelines that can draw crude from Jones Creek. 
    The lateral pipeline from Jones Creek to Enterprise's ECHO
terminal on the Houston Ship Channel is slated to be completed
in the third or early fourth quarter this year, Bill Ordemann,
group senior vice president of unregulated natural gas liquids,
crude and natural gas assets, said during the company's
fourth-quarter earnings conference call.
    The recently expanded Seaway pipeline can carry up to
400,000 bpd of crude to the Jones Creek facility from Cushing,
Oklahoma, the delivery point of the benchmark U.S. crude
contract.
    The curtailment order issued by Enterprise restricted flows
to an average of 175,000 bpd on that final leg of the pipeline
into Jones Creek. Ordemann said Seaway was operating as
designed, and the new lateral "will have the ability to
alleviate most of the bottlenecks we're seeing right now." 
    U.S. crude futures fell sharply relative to international
benchmark Brent on expectations the reduced Seaway throughput
would increase inventories at the Cushing hub. Stockpiles at
Cushing have swelled to record levels as rising volumes of crude
produced in North Dakota and Canada pour into the hub, which has
limited capacity to move it to the Gulf Coast refining center.
    Enterprise, which co-owns Seaway with Enbridge Inc,
said the penultimate delivery point on the pipeline in Katy,
Texas, can compensate for restrictions at Jones Creek.
    Ordemann also told analysts that the line's flow has
fluctuated since the expansion started up earlier this month,
with the high point at 380,000 bpd.
    Further relief to the bottleneck at Jones Creek could come
from plans for Phillips 66 to run higher volumes of sweet crude
at the Sweeny plant, which could mean it takes more oil from
Seaway. Seaway can carry both light and heavy oil.
    On Wednesday Phillips 66 Chief Executive Greg Garland told
analysts that the company was looking at running all sweet crude
at Sweeny. It is primarily a heavy crude refinery that can run
up to 60,000 bpd of sweet crude now, he said.
    An investment of up to $50 million would help increase its
ability to process sweet crude, he said.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.