Following through with market commitments to break through the Midcontinent crude bottleneck, Enbridge Inc. and Enterprise Products Partners LP said late Monday they will double the capacity of the Seaway Pipeline to 850,000 b/d by mid-2014 after lining up capacity commitments from shippers.
Separately, Enbridge also said it plans to proceed with an expansion of its Flanagan South Project, which is supposed to add incremental capacity for shippers seeking transportation from Flanagan, IL, to the Gulf of Mexico (GOM) coast, using part of the capacity on the reversed Seaway Pipeline System. The projects are seen as adding competitive pressure to the still-stalled Keystone XL pipeline project that TransCanada now has split into two separate projects (see Shale Daily, March 20).
When Enbridge and Enterprise made their announcement last November on reversing Seaway flow and expanding oil flow capacity from Cushing to the GOM, senior executives with the Keystone XL project told an investors' conference in Canada that there was enough oil in Cushing, OK, for all of the companies to compete in getting it to the Gulf (see Shale Daily,Nov. 18).
During a "supplemental binding open commitment period," Enterprise and Enbridge received additional commitments with terms ranging from five to 20 years, supporting the construction of a 512-mile, 30-inch diameter parallel line along the Seaway Pipeline route. Enbridge and Enterprise said this would add 450,000 b/d of capacity to the existing system.
"This capacity can be cost-effectively expanded on a timely basis with the addition of incremental pump stations," an Enbridge spokesperson said.
The additional commitments obtained for the Seaway system include five- and 10-year commitments for volumes originating at Cushing, and 10-, 15- and 20-year commitments for volumes starting at Flanagan, and moving to Seaway via Enbridge's Flanagan South line, the two companies said. "Substantially all of the initial capacity of the Seaway system has been contracted for these terms."
The companies said they are nearing completion of the first phase of the reversal of the Seaway Pipeline, which will provide 150,000 b/d of south-bound takeaway capacity from Cushing to the GOM by June 1. Then, following pump station additions and modifications expected by the first quarter next year, capacity would increase to 400,000 b/d, assuming a mix of light and heavy crude oil grades.
Enterprise CEO Michael Creel called the shippers' response to the open commitment period "tremendous" and credited them with recognizing that Seaway offers "a timely, economic and complete solution for relieving not only the bottleneck at Cushing, but facilitating the development and delivery of North American energy reserves."
And Enbridge CEO Pat Daniel emphasized that the combination of his company's Flanagan line and the Seaway system open up the GOM to the Bakken region producers. "By leveraging existing infrastructure wherever possible, impacts to landowners, communities and the environment will be minimized," Daniel said.