[PeakOiler]

Update on the Seaway Pipeline:

http://www.businessweek.com/articles/2013-09-05/the-giant-sucking-sound-why-is-oil-leaving-cushings-tanks-so-fast

Apparently the power station problems have been fixed and the flow rate is now back up to ~300k bpd.

Last year, Enterprise Products Partners (EPD) and Enbridge (ENB)reversed the flow of the 500-mile Seaway Pipeline to take crude out of Cushing and into Freeport, Tex. After a slow ramp up, and some hiccups along the way, Seaway is now pumping about 300,000 barrels per day out of Cushing.

[PeakOiler]

Rockman referred to this article in another thread. Thanks, Rockman!

Reuters Article

(Reuters) - A U.S. Federal Energy Regulatory Commission (FERC) judge ruled on Friday that the rates on the Seaway pipeline were too high, landing an initial victory for crude oil shippers in a long-running legal battle.

The 400,000 barrel per day (bpd) pipeline, jointly owned by Enterprise Product Partners LP and Enbridge Inc , is one of the few major arteries carrying crude oil from Cushing, Oklahoma - delivery point of the U.S. crude oil futures contract - to the U.S. Gulf Coast refining hub.

Seaway had proposed tariffs of $3.82 per barrel for light crude and $4.32 for heavy crude, according to the FERC decision, after reversing the line in 2012 to flow north-to south, in an attempt to allow shippers to drain a glut of crude oil at the Cushing storage hub.

I wonder if the pipeline will reach it's max capacity now that Enterprise gets a smaller cut and the refiners get a cheaper price. The PADD 3 imports may show a decreased rate. We'll see.

[Subjectivist]

http://images.businessweek.com/cms/2012 ... 40_950.jpg


Since that graphic was first posted about a year and a half ago most of the projects under construction on it have been completed and the brent wti spread has fallen to eight bucks a barrel. Brent has only declined about one dollar, so most of the gap closing is higher wti.

Will they cross paths again as summer driving season arrives?

[Tanada]

I came across another update thanks to the reference I gave above:

Brent-WTI Reconciliation Dreams Shattered

<<snip>>The Cushing crude stockpile still remains stubbornly high according to Energy Information Administration (EIA) data. Although down this past week (January 21, 2013) from a record high of 52 MMBbl on January 7, 2013 the stockpile is still only 187 MBbl lower than that record. There are two likely culprits for the continuing record stockpile. The first is Midwest refinery demand (see above) and the second is the strange goings on with the Seaway Pipeline.
The strange goings on came to the attention of spread fans last week (January 23, 2013). We learned then that the Seaway pipeline capacity between Cushing and Houston - increased from 150 Mb/d to 400 Mb/d earlier in January - had to be scaled back to 175 Mb/d by operator Enterprise. The company posted a notice to shippers stating that because of “unforeseen constraints in outbound takeaway…. the Jones Creek delivery point has reached maximum capacity”.
The constraint on the Seaway pipeline was caused by congestion at the Houston end of the system that the operator Enterprise says will potentially continue until late in 2013. The constraint will only be relieved once Enterprise completes a lateral pipeline from Jones Creek to its ECHO terminal

They might have looked shattered one year ago this month, but they sure are shaping their orbits closer today.

NVEZZ.com: Wednesday, February 12th:

Crude oil

West Texas Intermediate (WTI) light sweet crude has today reached its highest point since 27 December, at $100.61 a barrel, supported by data from the US American Petroleum Institute (API) showing that distillate inventories fell last week.

API yesterday reported that inventories at the oil hub in Cushing, Oklahoma shrank 2.49 million barrels.

“This is a very large decline, the largest I can remember,” says Strategic Energy and Economic Research president Michael Lynch. He observes that “the completion of pipelines is ending the bottleneck at Cushing”, which “suggests that the days of a big WTI-Brent spread are coming to an end”.

WTI has been trading at a discount to Brent in recent years due to rising US oil production and limited transportation for excess volumes to the Gulf Coast. Currently the spread is at $8.27 a barrel.

The decline at Cushing “is clearly a positive for oil prices,” says CMC Markets chief strategist Michael McCarthy.

API also reported distillate stockpiles down by 1.45 million barrels last week.
&
Brent crude today approached $109 a barrel after the news that Chinese oil imports hit a record high last month, lifting optimism for growing oil demand in the world’s second largest economy.

China’s crude oil imports y/y grew 11.9 percent last month to a record 28.16 million tonnes, or 6.63 million barrels per day, customs data showed today.

Also positive for economic conditions in the People’s Republic was that exports rose 10.6 percent in the January year, while imports climbed 10 percent.

“The strong data underpins strength in oil markets and across the whole commodity board,” writes Societe Generale head of commodities research Mark Keenan. “The data is so surprising that there's an element of checking whether it's in fact correct at the moment.”

More waffling and projections at
http://invezz.com/news/commodities/8792 ... -disappear

I especially like the last line I quoted;

The data is so surprising that there's an element of checking whether it's in fact correct at the moment.

Does that not sum up the reaction of the reporters and analysts from 2005 to 2014 rather well?

[Tanada]

Speaking for myself, I was blissfully unaware that the Seaway Pipeline suffered a rupture last week and has been shut down. This may or may not be a factor in the crude oil stockpile growing in Cushing as this line normally hauls the blended crude from Cushing to the Gulf Coast refiners for processing.

Feb 2 Enterprise Products Partners LP's Seaway pipeline is expected to resume service on or before Tuesday following its closure due to a leak in Collin County, Texas, earlier this week, the company said on Thursday.

The company continued to make progress in repairing its 30-inch (76-cm) diameter pipeline, which was struck by a third-party contractor on Monday, according to a company statement.

The 400,000-barrel-per-day pipeline, which brings crude from Cushing, Oklahoma, down to the U.S. Gulf Coast, is a joint venture between Enterprise Products Partners LP, the operator, and Enbridge Inc.. (Reporting by Swati Verma in Bengaluru; Editing by Jonathan Oatis)

http://www.reuters.com/article/usa-pipe ... SFWN1FN10S

[ROCKMAN]

T - They'll give the capacity of a pipeline but rarely tell us how much is actually flowing through it. Such as the other Seaway pipeline that parallels the ruptured line. Same true for the southern leg of the Keystone pipeline hauling oil from Cushing to Texas. What thru-put was lost due to the accident might have been picked up by the other pipelines...or not. I doubt we'll ever know for sure.

But an interesting update about that Keystone segment. From July 2015:

"The existing, southern segment of the Keystone oil pipeline system has pumped its billionth barrel, owner TransCanada Corp. said Monday. The company is using the milestone to promote the safety of its pipeline and push the Obama administration to approve the highly controversial northern segment, known as Keystone XL.

“This is tangible evidence of how the safe delivery of Canadian and U.S. crude oil is helping to fuel the everyday lives of the American people in the safest, most efficient and least greenhouse gas intensive way possible,” TransCanada President Russ Girling said in a statement.
“To put this achievement in perspective, it would take approximately 1.7 million train cars or 3.3 million trucks to transport one billion barrels of crude oil,” he continued.

The Keystone system began operating in 2010. It carries crude from Cushing, Okla. — a major hub for oil transportation — to refineries on Texas’s coast and in Illinois. Its regulatory approval took only two years, and President Obama spoke at a ceremony celebrating its opening.

{Yes: that segment of the Keystone Pipeline system that a few years before President Obama said was so critical to the US economy that he ordered all the federal agencies to do whatever the could to expedite the project so more Alberta oil sands production could be imported.}