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Reversing a giant: assessing North American market impacts and project-level economics from a reversal of the Capline pipeline

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13 October 2021

Reversing a giant: assessing North American market impacts and project-level economics from a reversal of the Capline pipeline

Report summary

Beginning in 1Q22 a reversal to southbound service of the Capline pipeline — the lone remaining major northbound flowing system out of the US Gulf Coast market — will complete the tectonic re-plumbing of North American crude infrastructure kicked off nearly a decade ago by revitalized US onshore production growth. However, there are questions about the market demand for such a reversal under present conditions with the new southbound capacity being added to an already fairly balanced Midwest market. In this insight we: • Explore market conditions facing the Capline reversal at the Patoka, IL origin • Overview the St. James refining market and size the opportunity for volumes on Capline • Assess pricing power of the reversed system and ultimate modelled volume profile • Dive into project economics based on modelled volumes and tariffs

Table of contents

Tables and charts

This report includes 12 images and tables including:

  • Capline northbound volumes (b/d)
  • Patoka supply chain map
  • St. James Louisiana Map
  • USGC-bound Western Canadian egress routes
  • St. James refining market crude slate by API band
  • St. James refining market heavy crude consumption source (b/d)
  • St. James refining market crude slate change with reversed Capline pipeline (b/d)
  • Estimated St. James premium pricing for WCS barrels vs. Houston market ($/bbl)
  • Estimated maximum Capline pipeline spot rates ($/bbl)
  • Capline volumes, Patoka origin (kb/d)
  • Capline volumes by crude quality
  • Initial Capital costs vs. project level IRR

What's included

This report contains:

  • Document

    Reversing a giant: assessing North American market impacts and project-level economics from a reversal of the Capline pipeline

    PDF 2.48 MB