Enterprise Draining 2.3 Million Barrels of Oil Into Cushing
Stock Chart for Enterprise Products Partners LP (EPD)
Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB) have begun draining about 2.3 million barrels of oil from the Seaway pipeline into tanks at Cushing, Oklahoma, as they prepare to reverse the line’s flow to take oil to U.S. Gulf Coast refiners.
The work began over the weekend, said Randy Burkhalter, a Houston-based vice president of investor relations at Enterprise, who declined to say how long it would take. The reversed flow is expected to begin by June 1, he said.
“The market has been anticipating this purge and had expected it to start February 15,” said Abudi Zein, a senior vice president at Genscape Inc., an energy information provider. “This will push storage higher, but the effect on prices should be muted.”
Enterprise and Enbridge announced Nov. 16 the reversed line would have an initial capacity of about 150,000 barrels a day. Pump modifications expected to be completed by early 2013 will boost daily capacity to 400,000 barrels, Enbridge said.
The Seaway pipeline is emptying at a rate of about 90,000 barrels a day, according to Zein. The line held 2.3 million barrels before the purge began, he said.
Genscape has been monitoring consistently higher pumping on the line since Feb. 18, Zein said. Louisville, Kentucky-based Genscape uses remote sensing technology to measure power consumed by pipeline pumping stations. The energy used is proportional to the power required to ship the crude, according to the company’s website.
Inventories at Cushing climbed 2 million barrels to 32.5 million in the week ended Feb. 10, the highest level since Sept. 2, according to the Energy Department. Last year’s peak of 41.9 million was the highest since the department began publishing Cushing data in 2004.
Oil for March delivery on the New York Mercantile Exchange touched $106.07 today, the highest intraday price since May 5.
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