US Enterprise plans crude pipeline from Cushing oil hub to Houston

26 April 2011 16:15  [Source: ICIS news]

TORONTO (ICIS)--Enterprise Products plans to develop a joint-venture pipeline project to ship crude oil from its facilities at the Cushing oil hub in Oklahoma to Houston, the US supplier of midstream services to the petrochemicals, natural gas, natural gas liquids (NGLs) and refined products industries said on Tuesday.

The 584-mile pipeline joint venture with Energy Transfer Partners would provide an outlet for more than 400,000 bbl/day of crude oil supplies which are currently stranded at Cushing and priced at a substantial discount to imported crude oil on the US Gulf coast, as Cushing lacks southbound pipeline capacity to the Gulf coast, Enterprise added.

Over the past three months, Cushing crude oil (West Texas Intermediate) has been trading at an average discount of approximately $12.57/bbl and $10.54/bbl to Louisiana Light Sweet and Brent crude oil respectively, Enterprise said.

“The project would allow greater access to the US Gulf coast-area refining complex and add approximately 500,000 barrels of storage capacity at new facilities to be constructed and owned by the joint venture at Enterprise's new Houston crude oil terminal,” it said.

The pipeline would also give refiners on the Gulf coast improved access to growing supplies of domestic crude oil production and an alternative to higher priced crude oil imports, it added.

Enterprise and Energy Transfer would each contribute existing assets to the joint venture, including Energy Transfer's 240-mile, 24-inch diameter natural gas pipeline in east Texas, which would comprise approximately 40% of the proposed system, Enterprise said.

By utilising existing infrastructure and following existing pipeline right-of-ways for 354 miles of project, the joint venture partners expect the pipeline to be in service much sooner than laying new pipe only, Enterprise added.

Subject to commitments from shippers and required regulatory approvals, the pipeline is expected to become operational in the fourth quarter of 2012. Financial details were not disclosed.

By: Stefan Baumgarten
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