Enterprise stands by ‘Wrangler’, despite Seaway pipeline reversal
17 November 2011 19:07 [Source: ICIS news]
HOUSTON (ICIS)--Enterprise Products and partner Enbridge will “redefine” their plan for the 800,000 bbl/day “Wrangler” pipeline project to ship crude oil from the Cushing oil hub in ?xml:namespace>Oklahoma to refiners at the Texas Gulf coast, an Enterprise official said on Thursday.
However, Enterprise spokesman Rick Rainey told ICIS that Wrangler was not cancelled, even after an agreement this week between Enterprise and Enbridge to reverse the flow of the existing Seaway crude pipeline to go from Cushing to the Texas Gulf coast.
The agreement between Enbridge and Enterprise to reverse Seaway came after separate deal under which Enbridge will acquire ConocoPhillips’ 50% interest in the Seaway crude pipeline system for $1.15bn (€851m). Enterprise holds the remaining 50% in Seaway.
“What we are doing is to redefine the scope of the Wrangler project,” Rainey said.
Instead of building a new single long-haul pipeline, as announced in September, the partners will now be using the Seaway reversal, plus potential investments in pipeline looping, to provide the volumes targeted under Wrangler, Rainey said.
The Seaway reversal will have a capacity of 400,000 bbl/day after becoming fully operational in 2013.
The project to reverse the 500-mile (805km) Seaway pipeline would offer Texas Gulf coast refiners secure and reliable supplies of oil, replacing imported crude.
At the same time, the project would provide an outlet for the glut of crude from Canada and North Dakota piling up at the Cushing oil hub.
Cushing crude is priced at a discount to imported crude oil. However, following the announcement on Wednesday to reverse Seaway, US crude futures surged.
Enterprise’s Rainey said the Seaway reversal would allow for Cushing oil to reach Texas refiners faster than under the original Wrangler proposal, and it would provide cost efficiencies.
At the same time, Enterprise and Enbridge would retain their capability to expand supplies, depending on demand from shippers, Rainey said.
As such, the companies are sticking to their original Wrangler concept and its targets, he added.
Enterprise Products is a Houston-based midstream energy firm that provides pipeline, storage and other services to the energy and petrochemicals industries. Enbridge, based in Calgary, Canada, is a major North American pipeline firm.
($1 = €0.74)By: Stefan Baumgarten+1 713 525 2653
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