Marathon Petroleum Corp. (NYSE:MPC) Pipeline

EPD, ENB, PAA, RDS-A

Marathon Petroleum Corp. is exploring the possibility of reversing a major pipeline to bring Crude Oil from the US Midwest to the Gulf Coast refining belt.

Changing direction of the 1.2-M BPD Capline pipeline would be the 2nd major pipeline reversal that could transport a glut of Crude Oil in the Midwest to the Gulf Coast, where it can be refined into petroleum products like gasoline and/or easily transported elsewhere.

Enbridge Inc. (NYSE:ENB) and Enterprise Products Partners (NYSE:EPD) plan to reverse the 150-K BPD Seaway pipeline within a month and expand its capacity to 400,000 BPD by Y 2013.

Marathon is part owner of Capline, which currently brings Crude Oil from Louisiana to Illinois. The pipeline has been little utilized as Crude from Canadian Oil Sands and US Midwest shale formations pour into the Crude Oil storage hub in Cushing, OK., where there are few ways to move the Crude Oil out of the region.

Plains All American Pipeline (NYSE:PAA) is the majority owner, while Royal Dutch Shell (NYSE:RDS-A) operates the 630-mile pipeline.

We are evaluating it now, said Mike Palmer, Marathon Petroleum's senior vice president of supply, distribution and planning, about a possible Capline reversal. He spoke in a conference call with investors. We're looking into alternatives to that asset as well as other assets.

A Plains All American representative was not immediately available. A Shell spokeswoman referred questions to the Capline owners.

Marathon Chief Executive Gary Heminger sounded cautious about reversing Capline, which brings Crude Oil to the company's 212-K BPD refinery in Kentucky. The Midwest needs a source of Gulf Coast Crude to feed refineries, Mr. Heminger said.

But with Capline running at such low rates, it might make more sense to use it to ship heavy Crude Oil from Canada or light, sweet Crude from the US Midwest to Gulf Coast refiners, said an energy analyst

It might make some sense economically, particularly if the pipeline is currently handling low volumes, Mr. Evans said.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.