Not quite two weeks into the open season on the possible reversal of the Capline pipeline, the rationale for the move is clear. The question is whether shippers will support it.

The answer will come by Nov. 17, when the season closes for the northbound pipeline, which currently runs from Louisiana to Illinois.

Shipper support will be part of the answer to whether the long-contemplated move is a savvy and efficient redevelopment of a major asset, or just a last-ditch effort to salvage some value for a line that has seen dwindling shipments.

Marathon Pipe Line LLC, operator of the 40-inch, 1.2 million-barrel-per-day Capline, announced a non-binding open season Oct. 17 to gauge shipper interest in a proposed reversal. The plan is to flip the line and ship from Patoka, Ill. to St. James, La., and then to either Gulf Coast refineries or waterborne export markets.

If the owners—Plains All American Pipeline (NYSE: PAA) (54%), Marathon Petroleum (33%) and BP Oil Pipeline Co. (13%)—decide to proceed, southbound flow could be operational by second-half 2022. Once in southbound service, Capline would have an initial capacity up to 300,000 barrels per day (bbl/d).

The reversed pipeline would be able to receive crude from connecting carriers at Patoka. At St. James, shippers would have access to a distribution network that includes refineries, terminals, ships, barges and rail.

Even in announcing the open season, Marathon acknowledged that “the pipeline was once a major transportation route for delivering crude that was imported or produced in the Gulf of Mexico to refineries in the Midwest. In recent years, Capline’s throughput has decreased due to various market factors.”

An Oct. 23 analysis by Morningstar measured that decline in throughput from about 1 million bbl/d in 2000 to about 550,000 bbl/d in 2010. Volume then tumbled, bottoming out at about 250,000 bbl/d in 2012, a mere quarter of the peak. Since then throughput recovered modestly, to about 350,000 bbl/d in 2016. That is expected to remain roughly flat for this year, based on actual shipment through August.

Morningstar noted that “Capline shipments showed some improvement as LOOP began accepting Eagle Ford crude deliveries and offshore production recovered from the 2010 Macondo Deepwater Horizon disaster. Shipments in 2017 through August averaged 340,000 bbl/d, only slightly lower than for the year-ago period, but still filling just 28% of Capline nameplate capacity.”

Observers have noted that the initial southbound capacity is planned for 300,000 bbl/d, which is nominally less that current northbound actual shipments. Supporters of the project note that northbound business is more likely to shrink than to grow, while the southbound capacity could easily be expanded as commitments grow.

Not all are convinced, including Sandy Fielden, director of oil and products research for Morningstar.

“While the reversal proposal is a shock to no one, the lengthy five-year gestation period before it happens and the limited 300,000 bbl/d proposed southbound capacity have raised eyebrows,” he wrote in the report. “We believe these represent necessary caution by the partners. That’s because demand for southbound capacity from the Midwest to the Louisiana Gulf Coast is currently saturated and is unlikely to pick up before the early 2020s—and even then, it will not come close to Capline’s full 1.2 million bbl/d capacity.”

The obvious crudes looking for southbound routes are growing western Canadian production, as well as U.S. production from the Bakken shale. According to Morningstar, Canadian production is set to increase by nearly 1 million bbl/d over the next eight years. And while Bakken production is not anticipated to grow, a significant portion of it has to rely on rail transport.

“Producers of both these crudes have been anxious to find routes to export markets,” Fielden wrote. They “could benefit from a Capline reversal that would offer tidewater access if combined with the proposed LOOP reversal to permit exports.”

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