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Enbridge purchase COP Seaway & reversal to provide early access to Gulf Coast – news results WTI hit

Home Forums Refining Community Refinery News Enbridge purchase COP Seaway & reversal to provide early access to Gulf Coast – news results WTI hit

This topic contains 2 replies, has 1 voice, and was last updated by  Charles Randall 8 years, 10 months ago.

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  • #2050

    basil parmesan
    Participant

    Enbridge to provide early access to Gulf Coast
    November 16, 2011 3:41 PM ET
    By ROB GILLIES
    TORONTO (AP) – Enbridge Inc. said Wednesday it will provide access to U.S. Gulf Coast refineries with a new pipeline that will help unclog a bottleneck of oil in the Midwest, an announcement that helped oil prices hit $100 per barrel in North America for the first time in nearly four months
    Calgary, Alberta-based Enbridge said it agreed to pay $1.15 billion to buy half ownership in the Seaway crude pipeline system between Texas and Oklahoma from ConocoPhillips.
    Enbridge said they’ll reverse the direction of crude oil flows on the Seaway pipeline to enable it to transport oil from Cushing, Oklahoma, to the Gulf Coast.
    Oil companies are eager to ship oil to the massive refinery hub of Texas as oil is bottlenecked in Cushing because of a glut of supply that has driven down the price for oil in North America.
    A lack of infrastructure out of Cushing has led to a price differential between oil traded in North America and the rest of the world. The spread in prices between West Texas Intermediate and Brent, which is used to price many foreign oil varieties, narrowed after the announcement.
    Enbridge’s announcement comes after the U.S. government delayed a decision on a federal permit for Enbridge rival TransCanada’s proposed pipeline that would take oil from the Alberta oil sands and Cushing to the refineries on the Gulf Coast. A decision on whether to allow it isn’t expected until the first quarter of 2013.
    Enbridge said its new pipeline line could be online with an initial capacity of 150,000 barrels per day by the second quarter of 2012. That capacity would be expanded to 400,000 barrels per day in 2013.
    Enbridge CEO Pat Daniel said in a statement the reversal will allow Texas Gulf Coast refineries to offset supplies of imported crude.
    Rival TransCanada has been looking to ship oil to Gulf Coast refineries with its proposed Keystone XL pipeline as the Gulf Coast refineries look to Canada as their oil import contracts from Venezuela and Mexico expire.
    Enbridge will become partners with Enterprise Products Partners LP, who own the other 50 percent and will continue to operate the pipeline system and storage facilities.
    TransCanada, meanwhile, said Wednesday that it may be able to speed up the Cushing-to-Texas leg of Keystone XL, but that would require approval form the U.S. State Department. Russ Girling, TransCanada’s president and CEO, said it’s still early in the process.
    Girling also said he expects the bottleneck in Cushing to continue because of new production from Canada and elsewhere and said both can be used.
    On Monday, TransCanada agreed to change the route of its Keystone XL pipeline to avoid the ecologically sensitive Sandhills region of Nebraska. It’s a move the company previously claimed wasn’t possible, but is as part of an effort to push through the proposed $7 billion project.
    New pipelines are critical to Canada which must have infrastructure in place to export its growing oil sands production from northern Alberta, which has the third largest reserves in the world with more than 170 billion barrels of proven reserves. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025. Only Saudi Arabia and Venezuela have more reserves.

  • #4745

    Charles Randall
    Participant

    Delay of Keystone XL Pipeline affects local refineries
    Posted: Thursday, January 18, 2012
    Updated: Jan 19, 2012 4:18 PM CST

    CALCASIEU PARISH, LA (KPLC) –
    The following is a press release from the ConocoPhillips Lake Charles Refinery.

    “The development of the Keystone XL pipeline presents a unique opportunity to provide greater energy security for American consumers, and the positive economic impact of the pipeline is clear it will create thousands of jobs, inject private sector spending into the economy and generate needed tax revenues.
    ConocoPhillips, as a major North American producer and refiner, ships crude oil on the existing Keystone pipeline today and will be a shipper on Keystone XL in the future. We have several refineries in the Mid-Continent and Gulf Coast regions, including our Lake Charles Refinery, that could purchase crude oil transported on this pipeline and convert it into important products to meet our nation’s energy needs.
    Delaying the pipeline poses serious energy security issues for the Gulf Coast-area refineries that were built for heavy oil. They now process oil from Mexico and Venezuela. Thousands of U.S. refining jobs depend on that supply. But heavy oil production in both countries is falling. And some of Venezuela’s oil is being diverted elsewhere for political reasons. Canada’s oil sands are an ideal replacement. Otherwise, imports will have to continue from more distant and possibly unfriendly sources if the heavy oil is even available.”

  • #4744

    Charles Randall
    Participant

    Here is article on TransCanada Keystone XL P/L Delay (still expected finish 2013) with COP perspective of positive impact CA Crude & P/L will have to their Mid-Continent & Gulf Refineries (all with cokers). COP is eager replace Maya & Venezuelan crude to its Gulf refineries with Canadian Hvy Crude. 
     
    This feeling is shared by ExxonMobil, Valero & number of other Gulf Refiners as past PDVSA/Venezuelan JV partners whose assets were privatized /stolen by Chavez. <Note also see the Beaumont News/SETX article on Keystone Delays: SEXT officials argue for Keystone XL pipeline (http://www.beaumontenterprise.com/news/article/SETX-officials-argue-for-Keyston-XL-pipeline-2652176.php).>
     
    COP has also recently sold half Seaway P/L ($1.5 Billion) to Enbridge a TransCanada rival (after COP Upstream-Downstream split whereby Upstream got make call on asset) which will now be reversed & moving 150MBD CA/Bakken crude into Gulf by mid- 2012 and potentially expanded 400MBD by 2013..so either way COP has lock on some increased CA Crude for its Ponca/Borger/Lake Charles/Sweeny refineries.
     
    The Cushing Crude Glut has been drained somewhat by over 40MBD of Rail shipments a normally expensive non-starter (Requires $8-12/bbl break even rail transport cost) has dropped +$20/bbl WTI vs. Brent differential that has made WTI cheaper than heavy Maya and created temporary windfall  
     
    All these reports of course do not point out that Obamas delay Keystone until 2013 was pure political payback to liberal & environmental fringes of his support who have also been major roadblocks to this job creating, Mideast & Venezuelan freeing cheap crude supply that would otherwise end up being exported to China.Regards

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