Four U.S. projects that could solve Canadian crude crunch

TransCanada and Enbridge aim to cash in on U.S. oil revival

December 05, 2012

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Enbridge Inc. and TransCanada Corp. are working to build out more pipeline capacity to the United States, as the renaissance in onshore oil production there leads to severe pipeline bottlenecks and price discounts for producers – both north and south of the 60th parallel. Here is a peek at four pipelines Enbridge and TransCanada are advancing that could relieve some of that pressure.

1. Keystone XL Pipeline Project
Proponent:
TransCanada Corp.
Startup: 2015
Grand Plan: Keystone XL continues to be a lightning rod in the U.S., where concerns about potential leaks, particularly along the Nebraska portion of the pipe that crosses the Ogallala Aquifer have dogged TransCanada. The U.S. State Department rejected the application to build Keystone XL in 2012. TransCanada submitted a new application in May that includes new proposed routes through Nebraska. The State Department has said it doesn’t anticipate concluding the review of the new application before the first quarter of 2013.

2. Flanagan South Pipeline Project
Proponent:
Enbridge Inc.
Startup: 2014
Grand Plan: Enbridge is proposing to build this interstate pipeline that will cross the states of Illinois, Missouri, Kansas and Oklahoma. The majority of the pipe will parallel its existing Spearhead crude oil pipeline right-of-way. The initial capacity for the pipeline, which will connect growing crude oil volumes from North Dakota’s Bakken and Alberta’s oil sands to the Cushing hub, will be 585,000 bpd. The company says it wants to start construction by mid-2013.

3. Seaway Pipeline Project
Proponent:
Enbridge Inc.
Startup: 2013 and 2014
Grand Plan: In May 2012, Enbridge completed a reversal of the flow of the Seaway pipeline. It can now ship oil from Cushing to the Freeport refinery hub on Texas’s Gulf Coast. The conduit is currently shipping 150,000 barrels per day (bpd), but by adding pump stations and other modifications, the company says by early 2013 the pipeline’s capacity will be 400,000 bpd. Meanwhile, Enbridge says it is going ahead with a twinning of the Seaway pipeline that will see the line’s capacity upped to 850,000 bpd by mid-2014.

4. Gulf Coast Pipeline Project
Proponent:
TransCanada Corp.
Startup: Mid to late 2013
Grand Plan: Construction of this project started in August and its initial capacity will be 700,000 bpd. But it can be expanded to ship 830,000 bpd to Gulf Coast refineries. The rationale behind building this conduit is to ease pipeline bottlenecks for producers who are producing growing quantities of oil from plays in states like North Dakota and Texas and who are looking to get it refined at Gulf Coast refineries.

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