UPDATE 2-Enterprise on pace for first Seaway expansion in Q1 2013

* Seaway looping to be finished in 2014

* Seaway to run about 850,000 bpd when completed

By Janet McGurty

Aug 1 (Reuters) - Enterprise Products Partners LP said on Wednesday its project to expand the Cushing-to-Houston Seaway crude oil pipeline from 150,000 barrels per day to 400,000 bpd was on schedule for completion in the first quarter of 2013.

Speaking to analysts during its second quarter earnings call, the company said that in addition to the initial expansion, looping or twinning a parallel pipeline will increase capacity by 450,000 to be completed by mid 2014.

Total capacity of the reversed line will reach about 850,000 bpd, depending on the mix of crude it carries.

Seaway, the first southbound pipeline to come online to alleviate the glut of oil in the storage hub of Cushing, Oklahoma, is jointly owned with Enbridge Inc.

Cushing is the delivery point of the New York Mercantile Exchange's West Texas Intermediate crude oil futures contract .

The line was reversed in mid-May to carry crude stuck in Midcontinent to the Gulf Coast where the largest concentration of the nation's refineries operate.

As a result, crude oil storage in Cushing declined to 45.1 million barrels last week from a high of 47.8 million in early June, according to government data.

The company said the reversed line, which began operation mid-May, has not gotten a regular mix of light and heavy crudes yet.

The line was supposed to run light, sweet crude until next year, traders said, but the wide discount between WTI and Canadian Western Canada Select has made increased heavy crude deliveries on the line.

Profit on the Canada-to-Cushing leg alone is about $5 a barrel, traders said, adding that WCS out of Cushing is priced at about a $13 barrel discount to WTI, far below mainstream U.S. domestic crudes, and a boon for the complex Gulf Coast refineries which have been rejigged to run heavier, sour crudes.

Enterprise said that pipeline only began contributing to earnings in June, the last month of the second quarter. The company posted a $96 million gross operating margin for the quarter, a 41 percent rise from the $68 million posted in 2011 quarter.