CERAWEEK-INTERVIEW-Marathon, Plains say reversed Capline could supply Louisiana refineries

HOUSTON, April 22 (Reuters) - A reversed Capline could move advantaged North American crudes to the Louisiana refining market, allowing it to receive the same kind of domestic oil influx that Texas output has given refineries in Houston and Corpus Christi, Marathon Petroleum Corp Chief Executive Gary Heminger said in an interview.

Marathon operates Capline, the nation's largest-volume oil pipeline with capacity to move up to 1.2 million barrels per day from Louisiana to Illinois that was once a major carrier of imports and Gulf of Mexico output.

In recent years its volumes have fallen sharply as inland U.S. crude output rose with the shale boom, prompting Marathon and the other two owners, Plains All American Pipeline LP and BP Plc, to study whether it should be reversed.

Capline could move Bakken light from North Dakota or heavy crude from Canada to the Louisiana market if reversed, Heminger said in an interview during the IHS CERAWeek energy conference in Houston. Bakken could flow to Wisconsin from North Dakota in Enbridge Inc (Toronto: ENB.TO - news) 's planned Sandpiper Pipeline - of which Marathon is the anchor shipper - and then to Patoka, Illinois, through other Enbridge lines.

Heminger has said if the reversal goes forward another south-to-north oil artery would be needed. He also has said the line could carry Canadian heavy crude to the Louisiana market paired with another source to feed it in Illinois.

"There's a lot of light crude in Houston" from the shale boom. "Not in New Orleans. Not in St. James," he said.

Plains supports reversing Capline. The company is building a $900 million, 200,000 bpd pipeline from the U.S. crude futures hub in Cushing, Oklahoma, to Valero Energy Corp's 180,000 bpd refinery in Memphis, Tennessee, that would replace Capline flows the plant now receives.

Plains also moves Texas crude via barge to its rail and storage hub in St. James, Louisiana - where Capline now originates.

"It could address the issue of getting crude to the eastern part of the Gulf Coast," Plains Chief Executive Greg Armstrong said during a panel appearance with Heminger at the conference. "It's not an economic use of the pipeline as it is."

Heminger said reversing the pipeline would not be technically difficult, and the study on the issue is ongoing.

"There will be meetings over the next month or two to finalize the study to determine what the future is," he said. (Reporting By Kristen Hays; Editing by Jessica Resnick-Ault and David Gregorios)