Plans for TransCanada Corp.’s Cushing MarketLink crude oil pipeline are still underway

Plans for TransCanada Corp.’s Cushing MarketLink crude oil pipeline between Cushing, Oklahoma and the Texas Gulf Coast, are still underway. This is in despite of plans to reverse the Seaway pipeline to deliver crude along a similar route. Meanwhile, Enbridge (US) Inc. and Enterprise Products Partners LP are evaluating plans for the 800 000 bpd newbuild Wrangler pipeline following the reversal decision.

Joining with EPP in its ownership, Enbridge recently bought ConocoPhillips’s share of Seaway, jointly announcing that its flow would be reversed to deliver crude from Cushing to the Gulf Coast. According to EPP, initial capacity of the reversed pipeline will be 150 000 bpd, but will reach 400 000 bpd by early 2013.

EPP also said the companies plan to expand Seaway beyond the 400 000 bpd mark believing it will become fully subscribed, and will therefore start an open season in January 2012 to gauge shipper interest in the additional capacity. EPP stopped short, however, of saying it had cancelled the 800 000 bpd Wrangler pipeline outright, saying only that its “plans for bringing crude down from Cushing had obviously changed.”

Earlier this year, TransCanada held a binding open season for its 150 000 bpd Cushing MarketLink pipeline, and the company noted that the Seaway reversal would not affect its plans to build the pipeline. TransCanada expects the pipeline to be in service by mid-2013.

The Canadian Association of Petroleum Producers has estimated US demand for Western Canadian crude in 2015 to be at least 380 000 bpd, based on contractual commitments to TransCanada’s Keystone XL pipeline. Whilst Keystone XL awaits approval from the US Department of State, the Seaway reversal and construction of Cushing MarketLink will help meet some of this demand and will also make other crude volumes currently bottlenecked in the Midcontinent more readily available on the Gulf Coast.

Increased pipeline capacity into Cushing and limited ability to move the arriving crude out has resulted in more oil flowing into the Midcontinent than the refinery system can handle, lowering prices for West Texas Intermediate crude in comparison to Brent and other comparable global crudes. This discount reached less than US$ 10/bbl in the wake of the announcement, from more than US$ 25/bbl a few weeks ago.

Read the article online at: https://www.worldpipelines.com/business-news/21112011/plans_for_transcanada_corp-%E2%80%99s_cushing_marketlink_crude_oil_pipeline_are_still_underway/