Enbridge CFO: Cushing Oil To Gulf Coast Project 'Under Discussion'
June 22 2011 - 10:24AM
Dow Jones News
Enbridge Inc. (ENB) is discussing with customers the viability
of shipping crude oil from the over-supplied storage hub of
Cushing, Okla., to refiners along the Gulf Coast, a company
executive said Wednesday.
Increasing oil production in the U.S. midcontinent region has
caused a supply glut in Cushing, forcing U.S. benchmark crude
prices to fall well below those for European crude oil. Relieving
supply pressure in Cushing has become a mantra for pipeline
operators such as Enbridge.
"We have projects under discussion with shippers on ideas for
linking Cushing to the Gulf Coast," Enbridge Chief Financial
Officer Richard Bird said during an analysts meeting.
The light, sweet crude coming out of the so-called mid-continent
region will eventually head to eastern refiners who now currently
depend on oil priced off European benchmark Brent, which is more
prevalent along the east coast, Bird said. That will create more
need for pipelines that flow east, Bird said.
Meanwhile, El Paso Corp. (EP) will make a decision this year
whether to build a pipeline to take ethane from the Marcellus shale
in Pennsylvania to chemical refiners in Louisiana, said Mark
Leland, president of El Paso's pipeline division.
The decision has been complicated by Shell Chemical's
announcement earlier this month that it will build a world-scale
chemical production facility in the Marcellus region, which could
keep much of the ethane produced in the shale at home, Leland said.
Shell Chemical is a subsidiary of Royal Dutch Shell (RDSA).
"The Shell announcement does throw a bit of a wrinkle" into the
decision process, Leland said at the analysts meeting.
-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201;
ben.lefebvre@dowjones.com
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