Enterprise Product Partners (EPD-N51.190.781.55%) and Enbridge (ENB-T38.930.320.83%) plan to reverse the flow of the Seaway oil pipeline by mid-May pending regulatory approval, allowing the line to start draining the glut of crude from the U.S. Midwest two weeks ahead of schedule.

The earlier May 17 start date for the pipeline reversal, which will initially carry about 150,000 barrels per day of crude from the Midwest to the Gulf Coast, was revealed in a regulatory filing to the Federal Energy Regulatory Commission (FERC), which also laid out proposed tariffs for the first time.

Enterprise spokesman Rick Rainey said the company has moved ahead of schedule on the reversal, which is aimed at sending the rising flows of Canadian and North Dakota crude that have built up in the Midwest to the Gulf Coast, where it fetches a hefty premium.

“We’ve had a really good response from our crews working in the field and have been working well with our partner. Everything’s falling into place very nicely,” Mr. Rainey said.

“We expect 150,000 barrels per day to be fully nominated,” Mr. Rainey said, adding he expected “at least” 10 percent of the pipeline capacity to be set aside for non-committed shippers.

High inventory levels at the Cushing, Okla. delivery point for the U.S. oil futures contract, also called West Texas Intermediate, have weighed on the contract relative to international benchmark Brent.

News that the reversal could start early caused Brent to fall sharply relative to WTI, with the Brent-WTI spread narrowing to around $15.25 (U.S.) a barrel from $19 on Friday, the biggest one-day percentage move since mid-November.

At 1:34 pm EDT, WTI was trading up 22 cents at $103.05 a barrel, while Brent was trading down $2.45 at $118.76 a barrel.

FERC said the regulator has 30 days to review the proposal from the date of the April 13 filing.

“This is something the commission will have to review and act on,” a FERC source said.

The Seaway Crude Pipeline Co. filing proposed initial rates for sending oil from Cushing to the Gulf ranging from $2.07 to $4.32 a barrel, though FERC may impose its own tariffs rather than market rates.

“This is designed to give some guidance to the market to give them an idea what we’re looking at in terms of base rates,” Enterprise spokesman Mr. Rainey said.

Analysts at Goldman Sachs said in a research note last week that the application for market-based tariffs had “induced considerable uncertainty” into the oil market that had stopped the Brent-WTI spread from narrowing earlier this year.

The rates proposed by the partnership, however, would appear to be in line with previous FERC rates.

“FERC has ruled against market-based rates in comparable cases, suggesting the request will be denied and the tariff will be closer to $3-$5 a barrel,” Goldman Sachs head of energy research David Greely said in the note last week, adding Brent-WTI could narrow to just $5 a barrel by the end of 2012.

Traders said they now expected the proposed rates would be approved as the tariffs appeared to be within range.

“The move in the arb today seems to imply the market assumes no hold up in approval,” one Connecticut-based oil broker said.

Enterprise said that crude shipped on the 150,000 bpd pipeline would initially take 15 days to travel from Cushing to the Gulf, but that time would fall to just five days when the pipeline’s capacity increases to 400,000 bpd in the first quarter of next year.

The initial announcement of the Seaway reversal last October saw the Brent-WTI spread collapse from a record peak of $28.10 a barrel to less than $6 a barrel by mid-November.

The spread had settled into a $6-$12 a barrel range between November and January, but a rapid buildup in crude stockpiles at Cushing in the first quarter of this year saw the spread blowout again to above $20 a barrel by early April.