Monday, February 17, 2014

It’s all hush-hush on turning Trunkline into a new crude oil pipeline to the Gulf

From:  The Barrel 

By John Kingston | September 12, 2012 09:30 AM 


Big pipeline projects tend to get announced with much fanfare. That’s not the case for Energy Transfer Partners, which is seeking to add one more north-to-south crude oil pipeline to drain the upper Midwest and Canada of its excess crude oil.

As reporting by Platts Meghan Gordon revealed, ETP has petitioned the US Federal Energy Regulatory Commission to allow it to make changes to its giant Trunkline natural gas line, which now runs south-to-north, into the upper Midwest. (You can see a map of the line on ETP’s webpage here.) For Trunkline to cut natural gas service to places like Michigan, FERC would need to permit it. Some of the affected states are protesting the move in front of FERC.

But the FERC move revealed the ETP plans in an indirect way, and it appears ETP otherwise doesn’t want to talk about its project, as Meghan reveals in her reporting. The company has put out no press release on it; its media people won’t talk about it. Outside of the FERC filing, there are no public declarations about the plans anywhere.

But they’ve talked to ETP equity analysts about it. One analyst, who requested anonymity, said: “This is going to be a huge project to reverse this line—hundreds of millions if not a billion dollars. So you’re going to have to ship enough barrels so that your cost per barrel is reasonable, competitive.” ETP has discussed the project with this analyst.

So if all projects are completed, the market would have the Seaway reversal (which already has begun), moving crude out of the Midwest to the tune of 850,000 b/d by 2014. The southern tail of the Keystone XL pipeline, formerly known as MarketLink but now called the Gulf Coast Pipeline Project, is projected to start operations out of Cushing next year with an initial capacity of 700,000 b/d on its way to 830,000 b/d. It also includes a 130,000 b/d Houston lateral line from Port Arthur to Houston.  MORE

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