Cushing Pipeline Flow Reversal on Track; WTI and Brent Narrowing

Link here.

While the Keystone XL withers on the vine, Enbridge will be putting in a new pipeline along an existing pipeline. Huge story. 

Having tested demand, Calgary, Alberta-based Enbridge has announced that it intends to go through with a plan to reverse the course of the Seaway oil pipeline between Houston, Texas, and Cushing, Oklahoma.

At present no pipelines extend from the important oil centers in Oklahoma to the refineries in Houston.

MarketWatch reports that Enbridge completed the purchase of a 50 percent stake in the Seaway pipeline from ConocoPhillips for $1.15 billion on Tuesday. In concert with Enterprise Products, which owns the other half of the pipeline, the company plans to add an additional pipeline along the course of the Seaway, a project that is expected to cost around $1.9 billion and be completed by mid-2014.

Until then, the Seaway plans to reverse course in the second quarter of 2012, reaching around 150,000 barrels per day midway through next year and around 400,000 barrels per day by the start of 2013.

The Keystone XL may eventually be built, but Enbridge is using this opportunity to great advantage. In hindsight, so many questions will be asked about TransCanada's strategy.