Need for Crude Oil Pipelines in Permian Prompts One Firm to Convert

Realizing an apparent need for pipelines to transport crude oil out of the Permian Basin, Houston-based Enterprise Products Partners L.P. has announced plans to convert one of its natural gas liquids pipelines to crude oil service.

The conversion should be completed in the first half of 2020 and will provide the partnership with total crude oil pipeline capacity of more than 650,000 barrels a day out of the Permian. The oil will be carried to Enterprise’s crude oil hub in the Houston area.

The company has three existing NGL pipelines stretching from the Permian Basin to the Texas Gulf Coast but is in the processing of constructing a fourth that will be operational in 2019. The move means natural gas liquids from one existing line will be diverted to the Shin Oak NLG Line.  The company has yet to decide which other pipeline will be converted to carrying crude oil.

 

“We have had strong demand for crude oil transportation, storage and marine terminal services for crude oil production from the Permian Basin,” said A.J. “Jim” Teague, chief executive officer of the general partner of Enterprise. “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.”

 

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