Seaway Reversal & Expansion Project on Schedule for Mid 2014

Construction is ongoing for Phase II of the Seaway pipeline reversal that began shipping up to 150Mb/d of crude from Cushing to Houston in June 2012. The 3-phase project will provide 850Mb/d of crude oil capacity by mid-2014. Today we’ll look at the expansion and hopefully provide some insights on this important pipeline project. 

Since June 2012, the 30-inch-diameter Seaway crude oil pipeline, jointly owned and operated by Enterprise Products Partners L.P. (EPD) (Houston) and Enbridge Inc. (ENB) (Calgary, Canada), has been delivering roughly 150 Mb/d of takeaway capacity from Cushing, Oklahoma, to Enterprise’s Freeport terminal in Freeport, Texas. The Seaway pipeline previously transported 350 Mb/d in the other direction – from Houston to Cushing. Enterprise is also planning two laterals to connect the Seaway pipeline to Gulf Coast Refineries. The first will be an 85-mile, 30-inch-diameter pipeline linking Freeport to the Enterprise ECHO terminal in Houston. The second will be a similar sized lateral between ECHO and Port Arthur providing refiners with access to roughly 200 Mb/d of crude.

Cushing, Oklahoma, known as the “Pipeline Crossroads of the World,” is a major storage and transmission hub with over 70 million barrels total storage capacity. A growing crude stockpile has developed in Cushing this year - just the latest spike in a rising trend of crude stocks at the Cushing hub since the last quarter of 2008. The initial 150 Mb/d Seaway reversal is the first of a 3- phase pipeline development intended to relieve the Cushing backlog.

The first phase of the Seaway pipeline reversal project changed the direction of crude oil flow. Instead of Cushing being the receipt point for incoming (mostly imported) crude from the Gulf Coast, Seaway now delivers domestic and Canadian crude out of Cushing into the lucrative refining market on the Gulf Coast. To power this reversal, one of five pump stations on the route - at Oakman, owned and operated by Enterprise, underwent re-piping on all four of its pumps plus the requisite pipeline cleaning and inspection. Although Enterprise only has a 50 percent interest in Seaway, project construction work is being handled exclusively by Enterprise and their engineering and procurement firm, S&B Holdings Ltd. (Houston).

The second phase of the Seaway reversal project is designed to boost the pipeline capacity from 150 Mb/d to 400Mb/d. Phase II involves reversing four existing pump stations along the over 500-mile pipeline route and adding a new origination station at Enterprise’s Cushing East Terminal. By keeping the original pipeline infrastructure in place and simply reversing the directional flow of the pumps, Enterprise and Enbridge were able to significantly reduce costs on the project as a whole. The only exception to the use of existing infrastructure is the new Cushing origination terminal. Enterprise and S&B expect to complete Phase II by the end of 2012, with a tight construction schedule beginning later this year. The plan is to conduct work on all four pump stations simultaneously to reduce construction time and bring all the additional capacity online at the same time.

The third phase of the project is to build a twin, or parallel crude oil pipeline alongside the original. The new pipeline will use existing right-of-way (ROW) to reduce regulatory red tape, and is expected to be the same 30-inch diameter as the original pipeline. Phase III is still being planned, so that details about the configuration of additional compression are undecided as yet. S&B are expected to continue their involvement in the front-end engineering and design of Phase III for as long as their contract – believed to conclude at the end of 2012 - allows. With that in mind, ROW clearing has already begun for Phase III.  The completion of Phase III will more than double the capacity of the Seaway pipeline to 850 Mb/d. The parallel pipeline is expected to go into service in mid-2014.