Seven years ago, the Seaway Pipeline literally changed the direction crude oil flows in the U.S.
In 2012, the Seaway was the only crude oil pipeline capable of transporting more than 500,000 Bbls of oil each day from the Gulf Coast to the Pipeline Crossroads of the World at the Cushing, Okla., storage terminal. There, supplies would connect to Midwest and Northern markets.
Then hydraulic fracturing changed everything.
With huge discoveries of shale oil in North Dakota, Colorado, Oklahoma and other parts of middle America, the traditional south-to-north pipeline routes in 2012 no longer applied. All those volumes quite suddenly had to find refineries and markets south—and fast. But soon, inventories at Cushing reached historic levels from oil still gushing in from the Gulf. WTI futures prices tanked. Still, the oil kept coming. That’s when the Seaway reversed course, making it the first pipeline in the nation to directionally change the flow of oil.
In a 50/50 joint venture between Houston-based Enterprise Products Partners and Canadian Enbridge, the Seaway began shipping oil in May 2012 from the Cushing hub to the vast refinery complex along the Gulf Coast. The line had an initial capacity of 150,000 Bbls per day. Over the next year, the system added more pump stations and other midstream assets that increased its volumes to 400,000 Bbls of oil a day. Next came construction of a twin pipeline paralleling the first, doubling Seaway’s capacity to 850,000 Bbls per day, and growing its entire system to now 670 miles.
But the Seaway isn’t finished yet. Enterprise and Enbridge announced Oct. 30th an open season to gauge support of another expansion that will increase its light crude capacity by an additional 200,000 Bbls a day and further unclog the midstream bottleneck. Dates of the open season haven’t been confirmed but RMR will keep you posted.
What do you think?