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Capline Owners Announce Study of Future Operations

Posted by October 30, 2014

Marathon Petroleum Corp and other owners of the 1.2-million-barrel-a-day Capline crude oil pipeline, which runs from the U.S. Gulf Coast to Patoka, Illinois, said they would study options for it as supplies expand in North America.

Traders and analysts have speculated that the line could be reversed to carry Canadian crude to U.S. Gulf Coast refineries. Marathon Chief Executive Officer Gary Heminger said in December that the company might consider reversing the pipeline but that another pipeline would be needed to carry crude from south to north.

The owners said they would consider connecting Capline to the proposed Diamond pipeline, which will run from the storage hub at Cushing Oklahoma to Valero Energy Corp's Memphis, Tennessee, refinery.

Capline originates at St. James, Louisiana, the delivery hub for Light Louisiana Sweet crude. The line is owned by subsidiaries of Plains All American Pipeline LP and BP Plc as well as Marathon.

"This analysis is being conducted to address the expanding crude oil supply in North America and the significant changes in crude oil demand patterns," Marathon said in a statement.

The companies plan to complete the study in the first quarter of 2015.

(Reporting by Jessica Resnick-Ault; Editing by Lisa Von Ahn)

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