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Enbridge storage at ECHO may lead to more Canadian crude in USGC: sources

Enbridge has subleased crude storage at Enterprise Product Partners' ECHO terminal in Houston, which may result in increased flows of Canadian crudes to the US Gulf Coast, according to a source familiar with the situation.

The Calgary-based midstream company has subleased 1 million barrels worth of storage at the 1.65 million-barrel capacity terminal, which has become a pricing point for Canadian crude in Houston following the Enterprise/Enbridge Seaway twin line beginning service in December and brought the line's capacity to 850,000 b/d. The crude terminal is slated to have 6.5 million barrels of storage available by late this year.

An Enbridge spokesman declined comment on the matter. "This is a non-material, regular aspect of our operations that we would not publicly discuss as it is commercially sensitive," he said.

US crude market sources are mixed as to whether Enbridge sub-leasing storage at ECHO would lead to more Canadian crude heading to the region, which has seen imports of oil from Canada increase drastically in 2015

"Enbridge and Enterprise are partners, and there is already Canadian at ECHO, so I'm not sure that really changes anything," one US crude trader said Thursday.

Through May, the most recent data available from the US Energy Information Administration, Canadian crude imports to the US Gulf Coast in 2015 have averaged nearly 333,000 b/d, up from 197,000 b/d in 2014.

Other sources believe Enbridge having storage in Houston could potentially lead to more re-exports from the Gulf Coast.

Tidal Energy, Enbridge's trading and marketing subsidiary, received a license to re-export Canadian crude from the US Gulf in April 2014. "I would say that today it certainly makes economic sense to ship WCS to Houston," Lipow Oil Associates President Andy Lipow said Thursday. "The logistics exist to re-export more Canadian crude oil, I think the only question would be if the economics work."

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