Plains CEO says Capline could move crude south or condensate north
HOUSTON (Reuters) - The Louisiana-to-Illinois Capline pipeline could be reversed to move U.S. inland crude oil output to the Gulf Coast or it could move more crude and condensate from South Texas north to meet Canadian demand, the head of Plains All American (PAA.N) said on Thursday.
During the company's fourth-quarter earnings conference call, Chief Executive Officer Greg Armstrong said the pipeline now runs at about 30 percent to 35 percent capacity.
Plains All American Pipeline LP is part owner of the 633-mile pipeline.
As to the line's future, he said cost advantages could prompt more movement of different types of crudes to the St. James terminal in Louisiana to travel north in the Capline. But robust U.S. oil output could support reversal later.
"I don't think it is really prudent to try and forecast any particular trend as to what is going to be shipped on that because i think the margin will change constantly," Armstrong said.
Royal Dutch Shell (RDSa.L) currently operates the pipeline, but Marathon Petroleum Corp (MPC.N) said last week that it will begin operating the line in September.
At that time Marathon CEO Gary Heminger told analysts that Marathon would continue to consider reversing the line to bring landlocked U.S. crude south as long as all owners agree on that strategy.
Armstrong also told analysts on Thursday that its South Texas pipeline projects aimed at moving more Eagle Ford crude to markets will be operational in March. The company had said parts of those systems would be operational in late 2012.
Those assets include Plains' joint venture 140-mile, 350,000 barrel-per-day (bpd) crude and condensate pipeline that will connect its Gardendale gathering system in LaSalle County, Texas, to Three Rivers and Corpus Christi, Texas, and other Gardendale projects.
The company's Corpus Christi dock is expected to be in service by June, the executive said. Another 35-mile, 350,000 bpd pipeline from Three Rivers to Lyssy is slated to start up in August.
(Reporting by Kristen Hays; Editing by Lisa Von Ahn and Andrew Hay)
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