US Enterprise to convert Permian NGL pipeline to crude oil

HOUSTON (ICIS)–Enterprise Products plans to convert one of its natural gas liquids (NGL) pipelines shipping NGLs from the Permian basin to the Texas Gulf Coast to crude oil service, the US midstream energy and petrochemical company said on Wednesday.

The conversion, expected to be completed in the first half of 2020, would provide Enterprise with a total crude oil pipeline capacity of more than 650,000 bbl/day from the Permian to the company’s crude oil hub in the Houston area.

Enterprise has three existing NGL pipelines from the Permian to the Texas Gulf Coast: the Seminole Blue, Seminole Red and Chaparral.

The Shin Oak NGL pipeline, currently under construction, will be its fourth NGL pipeline from the Permian to the Gulf Coast when it comes into service in the second quarter of 2019.

The completion of Shin Oak provides Enterprise the flexibility to divert NGL volumes from at least one of its existing NGL pipelines onto Shin Oak and repurpose the vacated NGL pipeline to crude oil service, it said. The company is currently evaluating which NGL pipeline to repurpose to crude, it added.

“We have had strong demand for crude oil transportation, storage and marine terminal services for crude oil production from the Permian basin,” said CEO AJ Teague.

“This repurposing of an NGL pipeline to crude oil service is another example of our system flexibility and the innovation of our employees to respond to customer needs while increasing the distributable cash flow and value of our partnership,” he said.

The Permian basin, located in western Texas and New Mexico, is described as one the most productive areas for oil and gas in the US.