On Wednesday, Enbridge Inc. (NYSE: ENB) announced that it would purchase ConocoPhillips’ (NYSE: COP) Seaway Pipeline, which runs from Cushing, Oklahoma to the Gulf Coast.
Enbridge will pay $1.15 billion for the pipeline and take control of 50%, while the other half remains to Enterprise Energy Partners (NYSE: EPD).
The two are joining together in a plan to reverse the pipeline’s flow, moving oil to the Gulf Coast and refiners from Oklahoma, Market Watch reports.
As Enbridge CEO Patrick D. Daniel told Market Watch:
“A Seaway reversal will provide capacity to move secure, reliable supply to Texas Gulf Coast refineries, offsetting supplies of imported crude.”
Enbridge and Enterprise were also planning the construction of a pipeline called the Wrangler line, which would move the same direction that the Seaway pipeline will move after the reversal.
Canadian Business reports that the Wrangler line will not be halted, though Sam Margolin of Global Hunter Securities told Market Watch that he believes otherwise.
In the meantime, Enbridge plans to put more money into the Seaway line. The company estimates that it will spend up to $300 million on pump stations, and Market Watch expects the project to be completed as early as next year.
According to the article, the Seaway line has the capacity to move 150,000 barrels a day, but Enbridge would like to increase this to 400,000 in the next few years.
On news of Enbridge’s purchase and plans for the pipeline, oil prices jumped.
U.S. crude increased to $101 per barrel on Wednesday, says Market Watch. Light, sweet crude rose 2.3% to the highest price since June.
West Texas Intermediate crude rose to $100.79, reported Canadian Business.
TransCanada still plans to move ahead with the Keystone XL pipeline, pending approval from the U.S. State Department.
Enterprise Energy Partners was up 0.24% on Wednesday to $45.24. Enbridge rose 1.32% to $34.59.
That’s all for now,