Plains: Capline owners near reversal plan

The owners of the underused 1.2mn b/d Capline crude pipeline from St James, Louisiana, to Patoka, Illinois, are finalizing plans to reverse the line, Plains All American Pipeline said today.

The reversal would likely take 18-24 months and include first purging the line and adding a small extension in Memphis, Tennessee, Plains said while reporting third quarter earnings.

In addition, the Capline reversal would likely be done in phases with a southern portion taking about 18 months and the north end a bit longer, Plains said.

Plains owns the line with Marathon Petroleum and BP.

Volumes on Capline, which currently moves crude north from St James to Patoka, have dropped sharply over the past year. Northbound crude flows in August averaged about 16,000 b/d, according to data from Louisiana state regulators.

Marathon said last week that the owners of Capline have been meeting frequently "in an effort to provide the market with a reverse Capline solution."

The line moved nearly 200,000 b/d as recently as November 2017, just before Plains brought the competing 200,000 b/d Diamond crude line into service. Capline flows have remained depressed since then, dropping to a near stand still in January.

Diamond, co-owned by refiner Valero, moves crude from Cushing, Oklahoma, to Memphis, Tennessee. Valero's 190,000 b/d refinery at Memphis had been the main customer on Capline.

Marathon is also developing a new oil pipeline that would flow from the Louisiana hub of St James to the Louisiana Offshore Oil Port (LOOP).

The 600,000 b/d Swordfish pipeline would be jointly developed by Crimson Midstream and MPLX, Marathon Petroleum's midstream affiliate, and flow from existing terminal facilities in St James and Raceland, Louisiana, to LOOP terminals in Clovelly.