HOUSTON -- Relief to the oil supply glut at Cushing, Okla., is coming very soon, a major pipeline company announced yesterday.

Executives at Enterprise Energy Partners L.P. told investors and financial analysts that its Seaway pipeline retooling project should be moving its first volumes of crude out of Cushing by the end of May. Enterprise is working to reverse the flow of the pipeline, to bring crude oil out of Cushing's storage tanks to storage facilities and refineries in the Houston area instead.

Mark Hurley, vice president for the company's crude oil and offshore energy business segments, said the reversed pipeline would be able to carry about 150,000 barrels of oil a day from Oklahoma to the Gulf Coast. Capacity would grow to around 400,000 barrels a day by early 2013.

Enterprise is also looking to expand the Seaway pipeline's capacity to beyond 400,000 barrels a day, Hurley announced. The company didn't say how much extra capacity it would like to add.

"Seaway, the reversal project, has a capacity to run about 400,000 barrels a day in mixed service," he said. "We don't think that will come close to meeting the demand from domestic and Canadian producers in the future, so we're looking to grow that."

During yesterday's conference with analysts, Enterprise executives laid out their company's ambitious growth plans for the years ahead.

Already controlling one of the largest pipeline networks and midstream facilities infrastructures in the world, Enterprise says it's still expanding it in anticipation of much higher volumes of U.S. domestic crude oil and natural gas production and a coming rebirth of petrochemical manufacturing that will need new product transport capabilities.

The Seaway reversal is one of the first announced projects designed to alleviate an oversupply of crude oil at Cushing that energy traders say is depressing North American crude oil prices relative to international barrels. Booming crude output from North Dakota's Bakken Shale is seen as the main cause of the glut.

Magellan Midstream Partners L.P. recently announced another pipeline flow reversal that would bypass Cushing by taking crude from west Texas to Houston. Last week, Magellan executives said they were also seeking to expand on those initial plans, to boost the capacity levels they had originally aimed at by some 66 percent (EnergyWire, March 16).

And TransCanada says it's moving forward with construction of a southern segment of the Keystone XL pipeline project from Cushing to Houston and Port Arthur, Texas (Greenwire, Feb. 27).

Both Keystone XL and Seaway will be tied into a massive new crude oil storage hub Enterprise is building in southeastern Houston. That project, the ECHO crude oil terminal, will be akin to "the Cushing of the U.S. Gulf Coast," and will be the hub for trading in a new crude oil contract beginning in 2013, Hurley said.

Eagle Ford 'coming on like gangbusters'

The company also has aggressive plans to capitalize on the growth in hydrocarbon production out of south Texas' Eagle Ford Shale formation, particularly in the petrochemicals business.

At the same analyst meeting, Enterprise executives said they will build two more natural gas liquids "fractionators" at the company's complex in Mont Belvieu, Texas. Both are expected to be in service by the end of 2013. A fractionator separates mixed streams of natural gas liquids and purifies them into products such as ethane, propane and butane.

The company also plans to build new pipelines or pipeline extensions in the Eagle Ford production zone to move crude to the ECHO terminal and natural gas liquids to its new and existing processing facilities. The first phase of those projects is also scheduled to come online in late May. The second phase of its Eagle Ford expansion plans will come into operation in about a year, the company says.

Enterprise says the national drilling rig count suggests that liquids extraction in the Eagle Ford area will grow to be even greater than what many in the industry now expect. By its count last year, more rigs were drilling for oil in the Eagle Ford than in any other shale or tight oil play in the United States, including the Bakken and west Texas.

"We estimate now that there are about 330,000 barrels a day produced in the Eagle Ford, of oil," Hurley said. "A year ago at this time, it was about 150,000 barrels a day, so it's more than doubled in a year. Two years ago, it was only about 30,000 barrels a day, so this area is coming on like gangbusters."