Seaway Crude Oil Pipeline Company LLC – a 50/50 joint venture between the affiliates of Enterprise Products Partners L.P (EPD - Free Report) and Enbridge Inc. (ENB - Free Report) – announced that it has completed the first expansion project of its Seaway oil pipeline. The pipeline runs between Cushing and the U.S. Gulf Coast.
The capacity of the 500-mile, 30-inch diameter pipeline has been raised to 400,000 barrels per day from about 150,000 barrels per day. Consequently, an extra 250,000 barrels per day will flow from the oil storage center in Cushing, Oklahoma to the refineries. The Seaway system has a terminal and crude oil distribution network. The network originates in Texas City, Texas and caters to all the refineries in the Houston area.
The expansion of this major pipeline was an effort to alleviate the obstacles faced by the shippers at Cushing, Oklahoma. The shippers were facing a bottleneck in transporting the increasing inland U.S. oil yield to more lucrative markets on the U.S. Gulf Coast.
Enterprise is the operator of the project, while Enbridge acquired its stake from ConocoPhillips (COP - Free Report) in November 16, 2011.
Earlier, in May 2012, Enterprise and Enbridge finished the reversal of the Seaway Pipeline, which previously allowed the pipeline to transport crude oil from the U.S. Gulf Coast to Cushing.
Calgary-based Enbridge is a leading energy delivery company. Its operations are spread across Canada and the U.S. that include the world's longest crude oil and liquids transportation system. Enbridge is also involved in natural gas gathering, transmission and midstream services apart from its power transmission business. The company delivers natural gas to customers in Ontario, Quebec, New Brunswick and New York State. Finally, as a generator of energy, Enbridge is also focused on developing alternative energy solutions like wind and solar energy, geothermal and hybrid fuel cells.
Enbridge currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.