January 4, 2013 [OPIS] - Seaway Crude Oil Pipeline Company LLC, which is owned by Enbridge and Enterprise Products Partners LP, said late on Wednesday that final work is being performed in preparation for the increase in capacity from approximately 150,000 b/d to approximately 400,000 b/d. The pipeline was pumping up to 150,000 b/d of crude from the Midwest to the Gulf Coast.
In order to complete the remaining pump station connections, transportation service has been suspended on the 500-mile, 30-inch diameter pipeline and is expected to resume operations at full rates by the end of next week. Industry sources said that the Seaway pipeline will deliver at its new expanded capacity of 400,000 b/d by the end of next week.
The arrival of additional price-advantaged crude from the Midcontinent could put more pressure on domestic crude price differentials such as those for Light Louisiana Sweet versus West Texas Intermediate (WTI), and possibly narrow WTI’s spread compared to Brent crude. The Brent-WTI crude price spread is around $22/bbl as of presstime, wider than many had predicted earlier in 2012.
In addition to the pipeline that transports crude oil from Cushing to the Gulf Coast, the Seaway system is comprised of a terminal and distribution network originating in Texas City, Texas, which serves refineries locally and in the Houston area. The Seaway system also includes dock facilities at Freeport and Texas City.
