In the last lesson, we talked about Cushing as the New York Mercantile Exchange crude oil hub for the buying and selling of physical crude products under the New York Mercantile Exchange contracts. We're going to talk a little bit about this. But I want to spend some time on it only because it's made the news a few times in the past year. There are certainly some issues related to pricing of crude oil, which again impacts the price of unleaded gasoline throughout the United States, involving Cushing and a surplus of crude oil that happens to be there.
Here are some aerial pictures of Cushing itself. It is a pipeline and above ground crude oil storage hub in Oklahoma. It is a pipeline hub. Hub-- we use the term whenever we're really talking about intersection of multiple pipes where any type of crude, natural gas liquids, natural gas can be exchanged or moved from one pipe to another.
They also have, as the previous picture showed, it's a crude oil storage tank farm as well. It's the world's largest crude oil storage facility. The companies of TEPPCO, Equilon, and TransCanada have crude oil pipelines that run to and away from Cushing.
It has 46 million barrel storage capacity that represents 16% of the total US crude oil storage capacity. It's designed to receive Gulf Coast and Midwest crude, to store it, and then transport it to refineries in Oklahoma and throughout the upper Midwest. Some of the key companies that are participants and owners of facilities of Cushing are Enbridge, BP, SemGroup, ConocoPhillips, Sunoco, Plains All American, and TEPPCO.
Here in the last couple years, there have been historically high inventory levels. In fact, they're running out of storage capacity for crude. There's no incremental storage capacity at present. In part, this is due to the dramatic increase in domestic production of crude oil from the shale plays.
The most recent ones are the Bakken Shale in North Dakota and the Mississippian Lime play in central or northern Oklahoma. The Canadian imports continue to increase. The Keystone XL pipeline received some press earlier this year. But a lot of people do not know that TransCanada already has a pipeline in place known as the Keystone pipeline. So there are shipments of Canadian crude oil entering the United States coming to Cushing as we speak.
One of the biggest issues, though, is that we can't get the surplus crude oil to the Gulf Coast. So as a result, Gulf Coast refiners-- that's the largest petrochemical refining area in the United States-- are having to pay more for crude oil than the WTI price. They're having to import more.
And so it's a price that is above WTI. It's not quite the North Sea Brent crude pricing that occurs in Europe. But it's more than they should have to pay because we can't get this excess supply down to them.
A couple of solutions to this problem, this bottleneck or this glut of supply, is to reverse the Seaway pipeline. The Seaway pipeline has been in existence for several decades. It originally was a crude oil pipeline that brought crude that was offloaded from tankers near Houston in the Ship Channel and Beaumont-Port Arthur areas of eastern Texas, right there on the Gulf. And the pipeline shipped it up to Cushing from there. In the late '80s, early '90s, it was actually a natural gas pipeline, taking natural gas from the mid-continent down to the Houston Ship Channel petrochemical and refining corridor, and was later converted back to crude oil. And it currently would bring crude oil to Cushing.
However, the demand is actually in the Gulf of Mexico. So Enbridge and Enterprise bought this pipeline from ConocoPhillips. It's 500 miles, runs from Freeport, Texas, up to Cushing, Oklahoma. And they have already reversed the flow.
currently by, in essence, redirecting the pumps along the pipeline. They're able to push 150,000 barrels a day of crude oil from Cushing down towards the Gulf Coast refiners. They're working on a project to expand the pipeline. And hopefully by next year, they'll be able to ship 400,000 barrels a day southbound to the Gulf Coast refineries.
The Keystone XL project is the one that has received some press in this past year. It's TransCanada Pipeline Company's proposed two phase crude oil pipeline. The objective is to move tar sands, crude oil, from Canada's Alberta province all the way down to Texas.
Phase one would run from Alberta, Canada, to Cushing, Oklahoma, approximately 1,180 miles. Phase two would run from Cushing, Oklahoma, to Nederland, Texas, on the Gulf Coast. And that segment is about 435 miles.
This is a picture of the Seaway pipeline, as you can see running from Cushing all the way down to Freeport, Texas. And in fact, the flow on this has been reversed. And here's the Keystone XL project,
the yellowish dotted lines, and, the existing Keystone pipeline, is in orange. And so you can see that TransCanada plans phase one to hook up with a portion of the existing Keystone pipeline. But phase two would run from Cushing on down to both the Houston Ship Channel and Port Arthur, Texas.
Some of the project issues, as I've already mentioned, Seaway pipeline. It's already reversed their pump stations. And it's flowing southward again already as we speak.
Keystone XL, phase one, requires a presidential permit for the international border crossing. Back in February, this was delayed by the US State Department because the pipeline route was going to go through a sensitive environmental area known as Sandhills in Nebraska. The TransCanada Keystone project's parent is investigating alternate routes, and in fact I believe has refiled for the permit to get the international border crossing.
Phase two, the section from Cushing, Oklahoma, down to Texas, is going to proceed. TransCanada has already received most of the regulatory approvals that they need. As a crude oil pipeline, they can only receive common carrier status. They are not a utility. And so they will have to negotiate with landowners the entire way.
There is a new project that ONEOK, out of Tulsa, Oklahoma, has announced. They're going to build a crude oil pipeline, which will run from the Bakken Shale area in North Dakota all the way to Cushing. It's estimated to be somewhere between $1.5 to $1.8 billion and 1,300 miles of pipeline. And they hope to have it in service in approximately three years' time.