Oil pipeline expansion may improve capacities, cut costs

Seaway pipeline expansion and reversal appears to be very promising as Seaway owners reveal future gains including maximized pipeline capacities and reduced transporting costs.

Plans to expand the oil pipeline of Seaway are expected to increase two times its existing capacity.  This was recently announced by Seaway owners/operators who continue to invest in oil through expansion and improvements in oil distribution system.

The owners of the pipeline are Enterprise Products Partners L.P. (EPP) and Enbridge, Inc. (EI), a Canadian company which recently bought half of the share in Seaway as an investment strategy. Both confirmed that shippers have eventually committed to go with the expansion plans for the Seaway pipeline and that this would pave the way to an increase in Seaway’s existing daily capacity to 850,000 barrels – hopefully in two years time.

EPP and EI mutually decided on the pipeline reversal with the prospect of transporting oil from Cushing, Oklahoma to the different oil refineries situated in the U.S. southern coast.  Aside from stepping up the development of crude oil in the northern parts of America, both companies expect some cuts in cost of transporting oil and, eventually, improved crude oil prices.

EI further disclosed that a segment of the reversed pipeline shall be used for future expansion, particularly its Flanagan South Project.  EI reported that this could certainly benefit oil shippers who plan to move oil products from Illinois to the southern coast.

“Expansion of the Seaway pipeline, along with Enbridge’s Flanagan South Project, will provide crude oil producers in the Bakken region and other emerging crude oil sources capacity to move secure, reliable supply to U.S. Gulf Coast oil plants, offsetting supplies of imported crude,” says Enbridge CEO, Pat Daniel.

Both companies expect to complete the initial stage of the pipeline reversal by mid-year.