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Pipeline expected to reduce Cushing oil glut

Oklahoma producers celebrate this week's announcement that the southern leg of the Keystone Pipeline will become operational Jan. 3.
by Adam Wilmoth Modified: December 5, 2013 at 9:43 pm •  Published: December 6, 2013

Oklahoma oil producers will soon find it easier to get their crude to Gulf Coast refineries as the southern leg of the Keystone pipeline is expected to become operational Jan. 3.

“It's a very positive move for us,” said Tony Say, CEO of Oklahoma City-based Clearwater Enterprises. “We have a lot of oil being developed in the state. Having another outlet going south is very positive for us.”

The 485-mile-long pipe likely will help Oklahoma producers receive a price more competitive with producers along the Gulf Coast, said Jeff Hume, Vice Chairman of Strategic Growth Initiatives at Oklahoma City-based Continental Resources Inc.

“It should provide a larger market for oil produced in the Mid-Continent,” he said.

“It can go to the Gulf Coast and compete with other grades of crude where the refineries are located,” he said.

The line has been under construction and was expected to open near the end of the year.

Unlike the northern leg of the Keystone XL pipeline, the southern section does not cross an international border and does not require presidential approval.

In regulatory filings this week, operator TransCanada detailed the opening date for the southern leg pipeline.

“We remain focused on completing the construction, testing and commissioning for the Gulf Coast Project,” the filing with the Federal Energy Regulatory Commission stated.

“Once the line fill is completed, we will safely ramp up the flow rates of crude oil moving through the pipeline. We look forward to beginning commercial operations in the near future, and helping move oil to refineries on the U.S. Gulf Coast that have been waiting for the oil we deliver to create gasoline and other products we all rely on.”

The pipe is expected to initially transport up to 700,000 barrels per day from Cushing to the Houston area in a move likely to relieve the glut in Oklahoma.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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