(WSJ 3/27/2012) - Two major energy companies are planning to build new pipelines that will move as much as 850,000 barrels of crude oil a day from Canada to refineries along the Gulf Coast by mid-2014, in the latest effort to cope with a surge of oil production in North America.
The separate projects, planned by Houston-based Enterprise Products Partners LP and Enbridge Inc. of Calgary, will compete with TransCanada Corp.'s proposed Keystone XL pipeline, a massive project to move crude from the oil sands of Alberta to U.S. refineries.
Enbridge and Enterprise already operate the Seaway Pipeline, which used to move oil north—from Freeport, Texas, near Houston, to the massive oil storage hub in Cushing, Okla. Last year the companies said they would reverse the flow of that pipeline because a recent surge in Canadian and U.S. oil production has created an overabundance at that location.
Enbridge, which is one of the largest shippers of Canadian crude oil to the U.S. with a capacity of 2.5 million barrels a day, is also going to start work on a pipeline to move oil from its existing Flanagan, Ill., pipeline hub to Cushing. The pipeline, which will run alongside an existing conduit, will have an initial capacity of 585,000 barrels per day.
Keystone and Seaway's combined capacity to move oil south from Cushing may be more than is needed in 2014 when they start up, said Rusty Braziel, an energy infrastructure analyst, but both will likely be running at full capacity soon after.
By TOM FOWLER
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