Construction of the Keystone Gulf Coast Pipeline (KGCP) has advanced considerably, according to Genscape’s most recent flyovers on September 29^th and October 6^th. Genscape uses proprietary monitoring technology and aerial photography to monitor market moving pipeline flow disruptions and infrastructure projects to offer market participants a real-time look at the factors driving the U.S. and Canadian oil markets.

On October 2^nd TransCanada stated that major construction would be complete by the end of October and that the pipe would be ready for line filling shortly thereafter. Genscape is now monitoring power consumption at the Lufkin and Delta pumping stations and will be able to detect the power consumption to these pumping stations indicative of line fill activity. Delta is not expected to be necessary for the initial start-up capacity. Genscape’s analysts’ believe that late December to early January is a realistic estimate for the completion of the line fill, based on acceleration in construction progress from last month's flight. The bulk of work remaining on the project is centered on the origin Cushing pumping station.

At the Cushing terminal, all seven newly constructed tanks have hydrotested. Mixer installation appears complete, while tank pipeline connections require further work. Genscape believes that the associated connections are not necessary for initial KGCP fill, and that the tanks could potentially be bypassed. The terminal will have 2.25mn bbls of storage capacity.

Additionally, exposed pipe was observed near the Tupelo and Bryan facilities and crews were observed working on pipeline connectivity along the ROW at the Tupelo pumping station. The Cromwell, Bryan, Winnsboro, Lufkin and Liberty pumping stations each have four pumps installed. Hydrostatic testing looks to be complete at all pumping facilities except for the Bryan pumping station. After successful hydrostatic testing, final grading would take place at each pumping facility followed by the installation of a security fence, according to a TransCanada document. The Bryan pumping facility did not have a security fence installed as of Gencscape’s latest flight. The Tupelo, Delta, Lake Tyler and Corrigan stations do not have pumps installed at this time. Genscape believes these stations do not need pumps for the line to flow at its initial stated capacity of 700,000 bpd.

The 36-inch-diameter KGCP will flow 485 miles from Cushing, OK, to Nederland, TX. The line will have an initial capacity of 700,000 bpd with the option to expand to 830,000 bpd. Line fill for KGCP is approximately 3.2mn bbls. Genscape estimates it will take approximately 40-60 days to fill the line at near 54-81,000 bpd fill rate. The Keystone pipeline from Hardisty, AB, to Patoka, IL, took nearly 180 days to fill in 2010 at near 50,000 bpd fill rate. Line fill for Keystone to Patoka was approximately 9.2mn bbls. TransCanada estimated the line fill duration would be approximately 30 days. Sunoco Logistics Partners LP’s Nederland terminal will be the initial terminus of the KGCP pipeline, according to a Reuters report. Valero’s Lucas storage terminal would also receive crude from the line in Q1 2014 according to a September SEC filing.

TransCanada stated construction on the Houston lateral was slated to begin Q4 2013 and is estimated to be in service by Q4 2014. The lateral will be approximately 48 miles from the Liberty pumping station to Houston’s refining center. Click here to view the aerial photos that supplement this report.

Genscape’s Mid-Continent Pipeline clients receive ongoing notices of pipeline flows and infrastructure projects in advance of market reports. A free trial of the Mid-Continent Pipeline service, and all Genscape’s oil market services, is available by visiting info.genscape.com/keystone-october.