TransCanada Activates Gulf Coast Project Pipeline, Delivering Crude Oil From Oklahoma To Texas
CALGARY, Alberta, Jan 22 (Reuters) – TransCanada Corp on Wednesday started delivering crude by a major new pipeline from Oklahoma to the Gulf Coast, commissioning a $2.Three billion challenge expected to help eradicate a bottleneck that has warped the U.S. oil market for 3 years.
For company officials, the launch of the seven hundred,000-barrel-per-day conduit — originally conceived because the southern leg of the contentious Keystone XL line humber oil refinery jobs philippines from Canada — was an opportunity to claim a milestone within the drive toward lowering U.S. reliance on international oil, hailing the challenge for delivering cheaper crude to Gulf refiners and creating hundreds of U.S. jobs.
For oil traders, the line from the bloated Cushing crude oil storage hub to the cluster of refineries on the Gulf Coast of Texas is a significant step toward erasing the yawning hole between depressed inland home crude oil costs and the a lot larger global prices paid on the coast.
Above all, it was a possibility to vent TransCanada’s mounting frustration over its predominant Keystone XL line, which, more than 5 years after the initial filing, continues to be awaiting a last resolution from the Obama Administration.
“As we convey Gulf Coast into operation, again showing people this isn’t an export pipeline and (will likely be) operated safely, that should provide the bottom underpinning and proof that Keystone XL is at the tip of the day simply another piece of power infrastructure,” Russ Girling, TransCanada’s chief executive, instructed reporters. “It is just a pipeline and it may be built and operated safely.”
In practical terms, the start-up of the Gulf Coast Venture will give Canada’s oil sands producers their first giant-scale access to the refining hub on Texas’ Gulf Coast. Only one other major line — the 400,000 bpd Seaway — runs from Cushing to the Gulf, and it has been pumping at properly under capability.
TransCanada mentioned humber oil refinery jobs philippines its pipeline will initially ship 300,000 bpd, rising as the company tests its new system. Alex Pourbaix, president of the corporate’s pipeline division, said he expects that shipments will average 520,000 bpd over humber oil refinery jobs philippines 2014.
The company has already begun building of a lateral line to Houston that is anticipated to be in service later this 12 months. When the lateral is complete, TransCanada can be in a position to spice up the capability of the Gulf Coast line to 830,000 bpd.
The road should finally assist lower stocks at Cushing, the pricing point for the new York Mercantile Trade’s West Texas Intermediate (WTI) contract, North America’s benchmark oil value. A surplus of crude at the storage hub has depressed U.S. oil costs, with WTI buying and selling well beneath crudes priced on the European Brent benchmark.
It may additionally help alleviate steep reductions on Canadian crude, which dropped to more than $forty per barrel under the WTI benchmark in November.
“It ought to strengthen WTI a little bit bit as a result of it should further relieve the bottleneck in getting crude from Cushing, Oklahoma, to the U.S. Gulf Coast,” said Patricia Mohr, commodity market specialist at Scotiabank.
Meanwhile TransCanada and environmental teams continue to spar over the line’s security and whether the crude will probably be destined for export markets. In idea, if sure conditions are met, shippers may search permission to export Canadian crude oil by way of Gulf Coast ports, consultants say.
“President Obama made the fallacious choice to quick-observe this export pipeline and residents will keep TransCanada accountable for every leak, spill and tragedy on households’ land and water,” Jane Kleeb, government director of Daring Nebraska, mentioned in a statement.
And once Canadian pipeline giant Enbridge Inc starts up its 600,000 bpd Flanagan South pipeline later this yr, more heavy Canadian crude will circulation into Cushing and down to the most important U.S. refining hub along the Gulf Coast, where refineries are largely configured to run heavy oil.
“It exhibits that with or with out Keystone XL’s northern leg, Gulf Coast refineries will likely be processing heavy Canadian crude,” Bill Day, spokesman for Valero Energy Corp, the largest U.S. refiner, stated. “There’s just such a market demand for it, it will get here a technique or the other.”
Valero can also be among the many Gulf Coast refiners seeking to increase access to Canadian crude by way of rail. The company plans to start out up a Canadian crude offloading facility at its 205,000 bpd St. Charles refinery in Norco, Louisiana, in the first quarter this 12 months and is considering an analogous mission at its 290,000 bpd refinery in Port Arthur, Texas.