Application of Enterprise Products Partners L.P. and Enbridge Inc. for Authorization to Charge Market-Based Rates under OR12-4.

STATEMENT A

THE GEOGRAPHIC MARKETS SERVED BY

THE REVERSED SEAWAY PIPELINE

TABLE OF CONTENTS

FOR STATEMENT A

Section Page

I. Description of the Reversed Seaway Pipeline ...................................................... 1

II. Enterpises and Enbridges Market-Based Rate Request ..................................... 5

III. Overview of the Formal Market Definition Process............................................... 5

IV. The Recommended Origin-Destination Market Approach to Geographic

Market Definition .................................................................................................. 8

A. Definition and Acceptance of the Origin-Destination Market

Approach..................................................................................................... 8

B. The Alternative Corridor Market Approach ................................................ 13

V. Counties are the Component Building Blocks for the Reversed Seaway

Pipelines Origin and Destination Market Areas ................................................. 13

VI. Destination Market Definition for the Reversed Seaway Pipeline ....................... 15

A. Description of the Reversed Seaway Pipelines Gulf Coast

Destination Market .................................................................................... 15

B. Approach Used to Define Destination Markets for Crude Oil

Pipelines ................................................................................................... 17

C. Description of the Reversed Seaway Pipelines Destination Market .......... 18

1. The Gulf Coast Definition of the Destination Market ......................... 19

2. The Houston to Lake Charles Definition of the Destination

Market .............................................................................................. 21

VII. Origin Market Definition for the Reversed Seaway Pipeline ............................... 23

A. Approach Used to Define Origin Markets for Crude Oil Pipelines ...............23

B. Description of the Reversed Seaway Pipelines Cushing Origin

Market ...........................................................................................................24

C. The Options Available to Shippers at Cushing Whose Crude Oil

Was Produced in Remote Areas ..................................................................27

1. The Rocky Mountain Area ...................................................................28

2. The Western Canada Area..................................................................29

3. The New Mexico-Texas Permian Basin Area .....................................30

A-i

1 STATEMENT A

2

3 THE GEOGRAPHIC MARKETS

4 SERVED BY THE REVERSED SEAWAY PIPELINE

5

6

7 I. Description of the Reversed Seaway Pipeline

8 The current Seaway Crude Pipeline Company (Seaway) moves crude oil south-

9 to-north from origins on the U.S. Gulf Coast to Cushing, Oklahoma. Seaway is

10 currently jointly owned by Enterprise Products Partners L.P. (Enterprise) and

11 ConocoPhillips, each of wh

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