Genscape, a company whose many activities include flying around Cushing, Oklahoma and figuring out from the sky how much oil is in the ocean of storage tanks there, has been taking a look at the Seaway Pipeline.
In a webinar held Tuesday morning, Genscape's Abudi Zein (full disclosure: a former Platts colleague) reviewed some of the many pictures his company has taken from the air or from satellite imagery over the 800 kilometers of the just-reversed Seaway Pipeline between Cushing and Freeport, Texas.
One of the things that Genscape has spent a lot of time looking at are the pumping stations being worked on down the line. Zein pointed out that the line flows from as much as 300 meters above sea level down to zero elevation at Freeport, so gravity is a contributing factor in pushing oil through the line.
But it's not all gravity; the pumps do matter. And furthermore, Zein said the combination of how many are in use and what type of crude is flowing down the line will impact Seaway's capacity.
Genscape as of yet does not have any indication that Seaway has started to utilize the first major pumping station, at Colbert, Oklahoma. It is able to monitor the power flow into a pumping station, and that is a sign whether it's operating. But still, "as we turn the pumps on, we can see through the model what the total flow is going to be," Zein said.
The number of pumps in use is significant when combined with the type of oil going through the line, because the line will be able to carry a greater quantity of lighter crudes such as WTI or a WTI look-alike than it can carry of heavier Western Canadian Select (WCS). So according to Genscape calculations, if Seaway is using one pump at Cushing, it can move 150,000 b/d of WTI. That figure was cited by the Seaway operators--Enbridge and Enterprise Partners--as the initial flow. A second pump brings capacity up to 200,000 b/d, 220,000 b/d for three pumps, and 250,000 b/d for four pumps.
Meanwhile, one pump at Cushing gets just 130,000 b/d of WCS down the line. If you get up to four pumps, the capacity rises only to 175,000 b/d.
So if it's WCS going in the line to fill it, Zein said, "you'll probably need Colbert (a pumping station in Oklahoma) and (the pump at) Cushing to get that 150,000 b/d. So that's why we believe it is much more likely that what we will have in the beginning is a line fill with light crude rather than with heavy crude. So we think what it being pumped into the line now is WTI or a WTI lookalike that is not heavy crude."
Movement on the pipeline began last Saturday. Zein said it would take 15.2 days for the line to fill, and when it does, it will have 2.3 million barrels.
Although Zein said Genscape believes it's mostly WTI or WTI look-alike now in the line, he said that given the disparity between amount of coking capacity in the US Midcontinent and the capacity in the Gulf Coast region, he expects a great deal of the flow on Seaway will be heavier crudes that can take advantage of that capacity. (Though he didn't mention them, there are several large refining projects in the Midcontinent underway to increase that region's capability to process heavier Canadian crudes.)
The planned ECHO storage terminal being developed by Enterprise near Freeport, which will take in crude from both Seaway and the Eagle Ford development in South Texas, has direct connections to roughly 430,000 b/d of coking capacity, Zein said. That's about double the Midcontinent, so the appeal of getting heavy crude down to ECHO via Seaway is obvious. But that impacts the total flow.
"If the appetite for heavy sour asserts itself, as we think it will, the rate of that flow will decrease," Zein said, as the lighter crudes presumed to be in the line now are displaced by heavier crudes and their slower rate of delivery.
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