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05 18, 2012 by Fuel Fix
The Seaway pipeline will begin carrying oil from the glutted Cushing, Okla. storage hub to the Gulf Coast refining market this weekend, owners announced Thursday.
Enterprise Products Partners and Enbridge Inc., partners in the 500-mile pipeline, said they have completed the six-month project to reverse Seaway’s flow.
The 30-inch wide pipeline has carried oil north since 1995. But growing crude production from Canada and northern states has created an oversupply in the midcontinent, allowing domestic oil to trade more cheaply than that imported from overseas.
Benchmark U.S. crude trades at about $93, about $15 below the benchmark foreign Brent crude price.
The oil inventory at Cushing has been hitting record levels for the past couple of years. Inventory there rose 43 percent during the first three months of this year, hitting about 40 million barrels, according to the U.S. Energy Information Administration. The increase was partially related to the emptying of the Seaway pipeline as it prepared for the reversal.
Seaway will carry up to 150,000 barrels of oil per day initially. Owners plan to increase its capacity to 400,000 barrels per day by early 2013, using pumping equipment and other modifications.
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