Pipelines planned amid high oil output
With a record amount of crude flowing from the nation’s shale fields, pipeline companies are continuing their wave of investments to move oil from those plays to refining and export hubs along the Texas Gulf Coast.
The Houston refiner Phillips 66 said Friday that it is planning two oil pipeline systems that would stretch from North Dakota and Oklahoma to the Texas Gulf Coast. Also, two pipeline and storage companies are exploring building a crude and condensate pipeline from Cushing, Okla., to Houston.
Phillips 66 said its proposed Liberty Pipeline would stretch from the Bakken Formation and the Rockies to Corpus Christi, presumably to take oil from North Dakota, Wyoming and Montana to refining and export hubs along the Texas Gulf Coast.
The project, which would ship 350,000 barrels of a crude a day, is tentatively slated for completion by the end of 2020. It would be built in a partnership with Wy-
oming-based Bridger Pipeline.
Likewise, Phillips 66 has scheduled its planned Red Oak Pipeline for completion in late 2020. Red Oak would trek from the storage and trading hub in Cushing to refineries and ports in Houston, Beaumont and Corpus Christi. The pipeline would ship 400,000 barrels a day.
Phillips 66 has increasingly invested in the pipeline sector, where there’s more room for growth. Phillips 66’s pipeline spinoff is currently building the Gray Oak oil pipeline from West Texas’ booming Permian Basin to Corpus Christi and Freeport. The company said it is planning to expand the Gray Oak system with additional capacity and new origin stations throughout much of the Permian.
The pipeline system is on track to be built by the end of 2019, but the expansion will take until late 2020.
Meanwhile, Magellan Midstream Partners of Tulsa, Okla., and Navigator Energy Services of Dallas announced an open season to gauge interest in a 500mile, 250,000-barrel-a-day pipeline from Cushing to Houston. The pipeline would terminate at Magellan’s terminal in east Houston, where oil and condensate could be delivered to Houston and Texas City refineries or to oil export terminals.
The oil and condensate, which is an oil byproduct, would be sourced from the Rocky Mountains region and North Dakota’s Bakken shale field.
If the pipeline is built, it is expected to come online by the end of 2020.
Magellan added that it is also evaluating a possible oil pipeline from Houston to Corpus Christi and a crude export terminal on Harbor Island near Corpus Christi. The export terminal would be able to load Very Large Crude Carriers, or VLCCs, which shippers prefer because of the cost savings related to the ships’ ability to transport larger volumes.
The Port of Corpus Christi has teamed up with asset manager The Carlyle Group to develop a VLCC-capable oil export terminal on another part of Harbor Island. Swiss commodities trader Trafigura has voiced interest in building an offshore VLCC-capable oil export buoy. The Port of Corpus Christi opposes the Trafigura plan and has not voiced an opinion on Magellan’s possible terminal.
Two pipeline and storage companies may build crude and condensate pipelines from Cushing, Okla., seen above, to Houston.