Adds detail about timing, Cushing and Gulf coast supply dynamics.
Enterprise Products Partners has completed construction of a 512-mile (823km) pipeline loop more than doubling the capacity of the Seaway system to 850,000 b/d, but start-up work on the line will continue through the third quarter.
Enterprise previously said the line could start up by May or June. The 30-inch pipeline twins the 400,000 b/d Seaway line moving crude from the Cushing, Oklahoma, storage hub to storage and terminal facilities near Houston, Texas.
Seaway ties into joint venture partner Enbridge's 600,000 b/d Flanagan South pipeline moving crude from Canada and the Bakken formation into Illinois and on to Cushing.
Seaway twin volumes could be delayed until October if joint venture owners Enterprise and Enbridge tie it to the startup of Enbridge's 600,000 b/d Flanagan South pipeline, investment bank Simmons & Co. said.
Enbridge pipeline capacity into Flanagan is not sufficient, Simmons added, forecasting lower utilization on Flanagan South and the Seaway twin as a result. Simmons expects there will be 450,000 b/d more pipeline capacity out of Flanagan than in, and sees Gulf coast inventories drawing this summer amid lower imports and delayed pipeline deliveries.
New pipelines are being closely watched as Cushing inventories last week fell by 1.4mn bl to 20.5mn bl, the lowest level seen since November 2008. Flanagan South and the Pony Express line slated for startup in August are expected to replenish supplies in Cushing, which have drained steadily since the start of the year because of a new 700,000 b/d TransCanada pipeline to Texas.
Enterprise also plans to this month complete a 100-mile, 30-inch spur from Houston to Beaumont, Texas, with start-up activities continuing through September.
Enterprise can load crude from Seaway pipeline on oceangoing barges and larger vessels at Freeport, Texas, and the line also connects to dock facilities in Texas City, Texas.
Once fully online, pipeline capacity from the midcontinent crude hub into the Texas coast will reach 1.55mn b/d. TransCanada's 700,000 b/d Gulf Coast pipeline, once known as the southern leg of Keystone XL, delivers into Nederland, Texas.
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