UPDATE 1-Enterprise expanding southeast Texas crude storage, distribution

HOUSTON Thu May 2, 2013 4:31pm EDT

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HOUSTON May 2 (Reuters) - Enterprise Products Partners will expand its crude oil storage and distribution system serving Southeast Texas refineries, the pipeline and distribution company said on Thursday.

The expansion includes an additional 4 million barrels of crude oil storage capacity at its ECHO terminal on the Houston Ship Channel, as well as about 55 miles of 24-inch and 36-inch pipeline to connect the terminal with major refineries in the southeast Texas market.

The expansion will be finished in phases, with the final phase done in the fourth quarter of 2014, the company said.

The ECHO terminal also will have access to Enterprise' marine terminal at Morgan's Point on the Houston Ship Channel.

The expansion comes amid booming U.S. and Canadian crude production that increasingly is replacing more expensive waterborne imports that traditionally supplied southeast Texas refineries, Enterprise said.

As production increasingly flows into that market from the Eagle Ford shale and Permian Basin in Texas, North Dakota's Bakken shale, other Midcontinent shale plays and Canada, "there will be a significant increase in crude oil bound for the Gulf Coast, the company said. Those crudes arrive via rail, barge and pipeline.

Other companies also have increased storage and distribution capacity along the U.S. Gulf Coast to accommodate that incoming supply, including Kinder Morgan Energy Partners, Plains All American and Sunoco Logistics Partners

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