March 17, 2010

Pipeline pondering flow change


— By

Staff Writer

Portland Pipe Line and its parent company in Canada are studying the possibility of spending $100 million to reverse the flow of oil through one of two 236-mile-long pipelines that travel underground between South Portland and Montreal.

The reversal would allow the company to deliver Western Canadian crude oil to refineries in the United States.

If the study shows that pumping oil from Canada to the Maine coast is economically viable, Canadian crude could start flowing in 2010, Portland Pipe Line and its parent company, Montreal Pipe Line, announced Wednesday.

There are two working pipelines connecting South Portland and Montreal. The plan calls for reversing the flow through one of them while maintaining the current flow of oil from South Portland to Montreal through the other.

Oil would move in both directions at the same time, said David Cyr, the treasurer of Portland Pipe Line. He said the Canadian and foreign oil would be of different quality and grade and have different customers.

He said the total volume of oil moving both ways would be the same amount traveling to refineries in Quebec today, about 400,000 gallons a day.

Portland is the largest oil port on the East Coast, with nearly 200 oil tankers visiting each year.

While the proposed changes would not affect the level employment at the terminal or the number of ships coming into the harbor, the export of oil would make the port more diverse and provide more stability, said Jeff Monroe, Portland's ports and transportation director.

This would be good news for the companies that provide services to the tankers, such as the pilots, tugboats and ship chandlers.

''I really hope this works out,'' he said.

Portland Mayor Ed Suslovic agreed. ''The more diversity we have in the direction of the cargo,'' he said, ''the more insulated we are from the ups and downs of the market.''

The pipeline was built in 1941 to provide for the safe transport of oil to Quebec at a time when German U-boats were patrolling the western Atlantic.

The flow has continued because it has proven to be the most cost-effective way to move foreign oil to Quebec.

In recent years, though, as oilfields in Alberta have increased production, Canada has become less dependent on foreign oil. The amount of oil passing through the pipeline has declined by about 7 million tons over the last four years, Monroe said.

Portland Pipeline has proven to be a valuable economic asset that can adapt to changing times, and this is another example of that ability, said Nicholas Walsh, an attorney who handles waterfront issues in the harbor. 

Portland Pipeline operates a tanker unloading facility in South Portland and a tank farm. It is a wholly owned subsidiary of Montreal Pipe Line, a privately held company that is based in Montreal.

The Canadian company owns the system of pump stations and two pipelines, one 18 inches in diameter and the other 24 inches. 

The company has hired a Canadian engineering firm to examine cost and design issues involved with reversing the flow of oil through the 18-inch pipeline, installing new pumping equipment at both ends of the pipeline system and along the pipeline route, and modifying marine terminal facilities in South Portland.

Staff writer Tom Bell can be contacted at 791-6369 or at

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