Boston-based private equity firm ArcLight may have just scored the investment deal of a lifetime.Read More
Nearly eight years ago, the 500-mile Seaway Pipeline became the nation’s first of its kind to reverse the direction crude oil traditionally flowed south to north. An historic moment without question, and the U.S. shale revolution no doubt played the starring role in that boardroom decision. Since then others like Lotus Midstream have mulled the prospect of changing flow course on its Centurion Pipeline, but the 633-mile, 40-inch Capline soon will eclipse the size and scope of any other oil pipeline reversal in American history.
Originating in St. James, La., on the Gulf Coast, the Capline terminates in Patoka, Ill., and bookmarks the nation’s longest and largest crude oil pipeline. With a capacity of 1.2 million BPD, Capline traditionally has supplied midwestern refineries with imported crude oil. But all that came to a screeching halt when the Bakken said, “Not so fast, cowboy” with its prolific oil shale production. Declining supply movement from the south quickly put the Capline in a virtual standstill, moving less than 14% of its total capacity—or about 16,000 BPD—headed north.
Time to regroup.
Capline partners Plains All American, Marathon and BP a year ago announced a binding open season for the pipeline’s reversal and, to date, the JV has completed purging on the mainline to remove contaminants from the pipe. But for a pipeline once considered a major artery for imports, the Capline faces serious competition with new pipeline onboards. Nevertheless, the Capline is expected to begin light crude service by the middle of next year and heavy crude service in 2022, boosting flows of Canadian and Mid-Continent crude oil flowing north to the La., Gulf Coast.
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