Enterprise says Seaway Pipeline bottlenecks to end with lateral to ECHO
Houston (Platts)--31Jan2013/141 pm EST/1841 GMT
Recent bottlenecks on the reversed Seaway Pipeline will be alleviated
later this year by a new lateral line that will transport crude coming off of
the joint venture pipeline to operator Enterprise's ECHO terminal in Houston,
a company official said Thursday.
Additionally, Enterprise is considering a project to use the company's
shipping fleet to give crude supplies from Seaway Pipeline additional access
to the Gulf of Mexico by barge or larger vessels, Bill Ordemann, senior vice
president of unregulated liquids, crude oil and natural gas, said during a
call to discuss the company's fourth quarter 2012 earnings.
"As far as the barge fleet, we are looking at a project right now that
would give Seaway access to the water," Ordemann said, adding "that [it] is
going to be later this year before we shake [it] out."
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The recently expanded 400,000 b/d Seaway Pipeline runs from Cushing,
Oklahoma, to the Jones Creek, Texas, terminal near Freeport. The pipeline
system is a 50:50 joint venture between Enterprise and Enbridge.
Last week, Enterprise said it had reduced throughput to a total of
175,000 b/d because of high inventory at the Jones Creek Terminal.
"Seaway as we look at it today is operating as per design for injections
out of Cushing and the ability for the pipeline to move crude oil down to
Jones Creek," Ordemann said on the call, adding that the line's throughput
fluctuates daily on depending on shipping nominations and third-party
takeaway ability at the end of the line.
An official on the call Thursday said that the line has been as full as
380,000 b/d since the expansion came online in January.
Enterprise had said last week that inventory levels were high at the
Jones Creek terminal due to turnaround work at the 260,000 b/d Phillips 66
Sweeny refinery in nearby Old Ocean, Texas.
The Phillips 66 refinery is a major recipient of Seaway crude, Tudor
Pickering analyst Brad Olsen said in an interview Thursday. On the Enterprise
call, Olsen asked officials about their plans to relieve the recent
"In the third quarter of 2013, they are going to be hooked into enough
storage that they won't care about refinery outages," Olsen said. "Storage
works as a shock absorber."
The ECHO terminal currently has two storage tanks in service and a third
is expected to be available mid-February, A.J. "Jim" Teague, executive vice
president and chief operating officer of Enterprise's general partner said
during the call. He did not say the total amount of storage now available. An
additional 900,000 barrels of capacity and will be up and running in early
2014, he said.
Previously, Enterprise said that the ECHO terminal's initial capacity
would be 750,000 b/d.
The lateral pipeline should begin service in the third or early fourth
quarter, Ordemann said. The pipeline will be 36 inches in diameter,
Enterprise spokesman Rick Rainey previously said.
Refiners have noted that there is more crude on the west side of the
Gulf Coast than on the east side, and players are already barging crude from
the Eagle Ford Shale in South Texas and from the Seaway Pipeline to the
Louisiana market and to the East Coast, Olsen said.
Another Seaway lateral, which will move the crude to the Port Arthur
market from ECHO, is expected to start up in early 2014, Ordemann said. This
lateral and Shell's Ho-Ho pipeline reversal project are expected to help
relieve a growing crude supply glut in the Houston market.
The Houston to Nederland, Texas, segment of Shell Pipeline's Houston to
Houma, Louisiana, crude pipeline reversal project was recently opened for
shippers. subsequent phases of the project include reversing the pipeline
between Nederland/Port Neches and delivery points in Louisiana to service
facilities in the Lake Charles, Clovelly and St. James areas.
Earlier Thursday, Enterprise, in its earnings statement, said it
increased the volume of crude oil, products and other liquids pumped through
its US pipeline system by 13% to a new record high of 4.5 million b/d in the
fourth quarter of 2012 (See story, 1154 GMT). Despite the increased volumes,
Q4 net income was down 15% at $617 million compared with the same period of
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