Yet another crude oil pipeline is carrying crude directly to South Texas ports and refineries rather than to the Cushing hub in northern Oklahoma.
Days after we reported how Cushing was losing some of its influence in the crude oil market and how more and more pipelines were carrying oil directly to market, Enterprise Products Partners L.P. announced its Midland-to-Sealy line was in full service in west Texas.
The 416-mile line has an expanded capacity of 540,000 barrels per day and is capable of moving batched grades of crude oil and condensate. The company said with the completion of more tankage and infrastructure and operating enhancements, the pipeline has an expected capacity of 575,000 barrels a day by May. It is already fully subscribed under long-term contracts.
The line will carry oil to Sealy located west of Houston, then connects directly to Enterprise’s 36-inch diameter Ranch II crude line which extends to the company’s 7.4 million barrel ECHO crude oil terminal in southeast Houston.
In announcing the opening of the line, Enterprise said the Midland-to-ECHO system will provide a solution allowing Permian Basin producers to deliver crude all the way to the Gulf Coast. As part of the same system, Enterprise already has a 143-mile pipeline system delivering more than 300,000 barrels a day of crude oil and condensate from the Delaware Basin into its Midland Terminal.
“With crude oil production from the Permian Basin projected to grow by approximately 60 percent to more than 5 million BPD over the next four years, Enterprise’s pipeline system from Midland to Houston provides customers with much needed flow assurance and market choices,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “From our ECHO terminal, customers can access the major Gulf Coast refineries in the Houston, Texas City and Beaumont/Port Arthur areas, which represent more than 4 million BPD of capacity, as well as Enterprise’s extensive network of deepwater docks. As crude oil production continues to grow, access to the water has never been more important, and Enterprise is well positioned to facilitate the growing global demand for U.S. production.”