January 29, 2020 / 5:26 PM / 2 months ago

UPDATE 1-MPLX says reversed Capline pipeline to begin light crude service in mid-2021

(Adds further details on projects, paragraphs 5-12)

NEW YORK, Jan 29 (Reuters) - MPLX LP said on Wednesday the reversal of the Capline pipeline was progressing as planned, with the line on track to begin light crude service in mid-2021 and heavy crude service in 2022.

Capline, the largest U.S. crude pipeline, currently runs from the Gulf Coast to refineries in the Midwest.

Volumes on Capline, once a major artery for imports and Gulf of Mexico crude used by U.S. Midwest refiners, have declined sharply as the U.S. shale boom has pushed inland crude to the East Coast and Gulf Coast.

The line, once reversed, is expected to boost flows of Canadian and Mid-Continent crude to the St. James, Louisiana market.

MPLX said that during the fourth quarter, it completed purging on the mainline, a process during which contaminants are removed from the piping.

The Wink-to-Webster Permian crude oil project, in which MPLX has a 15% equity ownership, is also advancing, the company said during its fourth quarter earnings call.

The 1.5 million barrel-per-day (bpd) pipeline system is expected to be in service in early 2021 and all of the contractable capacity of the line is covered by minimum volume commitments, MPLX said.

Midstream companies have raced to add pipeline capacity from the Permian, the biggest U.S. shale oil basin, to the Gulf Coast as the shale boom has helped send U.S. crude exports to record highs.

However, the pace of new projects has slowed as production growth is expected to ease due to producers' plans to reduce spending on new drilling for a second year in a row in 2020.

During the fourth quarter, the 2 billion cubic feet per day (bcfd) Whistler natural gas pipeline progressed further,, with about 95% of its capacity committed with minimum volume contracts, MPLX said.

The line is expected to start up in the second half of 2021.

MPLX said a final investment decision on its Permian to Gulf Coast natural gas liquids (NGL) pipeline, called BANGL, is expected in the near term. (Reporting by Devika Krishna Kumar in New York; Editing by David Gregorio)

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