TransCanada Official Sees Opportunity in Reversing Seaway Pipeline Flow

Strategic Insights -

A TransCanada executive has acknowledged that new pipelines are needed to transport oil from the Cushing hub in Oklahoma to key market areas along the southern US coast. The decision by Enbridge Inc. and Enterprise Products Partners to reverse the flow of the Seaway pipeline to carry oil from Cushing to refineries along the southern coast is seen as a positive development by Russ Girling, the top executive at pipeline company TransCanada. Girling stated that oil from Cushing is likely to be transported through the Seaway pipeline, which would still require additional pipeline capacity to reach the Gulf Coast. This development is seen as a potential opportunity for TransCanada to build part of the Keystone XL pipeline, subject to State Department approval.

Key Takeaways:

  • TransCanada's top executive, Russ Girling, sees the reversal of Seaway pipeline flow as a positive development for his company's plans to build the $7 billion Keystone XL pipeline.
  • The reversal of Seaway pipeline flow would result in oil from Cushing being transported to refineries along the southern coast, highlighting the need for additional pipeline capacity to reach the Gulf Coast.
  • TransCanada is considering building part of the Keystone XL pipeline to transport oil out of the Cushing hub, subject to State Department approval.
  • The State Department has delayed its decision on the Keystone XL pipeline for at least another year, while reviewing alternative route options in Nebraska.
  • Enbridge Inc. plans to build two new pipelines in the United States tied to Cushing, which could potentially alleviate pressure on the Cushing hub.
  • The combination of the Seaway pipeline reversal and potential Keystone XL pipeline construction could strengthen the oil infrastructure in the region.

Statistics:

  • The Seaway pipeline is a 500-mile pipeline that connects Cushing, Oklahoma to the Gulf Coast refineries (Source: Bloomberg News, November 2013).
  • The draft environmental impact statement for the Keystone XL pipeline estimated it would create up to 42,100 jobs (Source: State Department, 2011).
  • The Keystone XL pipeline is estimated to cost $7 billion, making it one of the largest energy infrastructure projects in US history (Source: TransCanada, 2013).

Sources:

  • UPI (November 18)
  • Bloomberg News (November 18)
  • State Department (2011)
  • TransCanada (2013)
  • Enbridge Inc.