Phillips 66 has announced two separate 50/50 joint ventures to build a $1.6 billion pipeline from the Bakken to Cushing, Oklahoma and another $2.5 billion project to carry oil from Cushing and the Permian Basin to the Gulf Coast refineries.
The 24-inch Liberty pipeline will carry oil out of the Rockies and the Bakken directly to the Cushing hub in north central Oklahoma. Phillips created a joint venture with Bridger Pipeline LLC to build the line and hopes to have it operational in the first quarter of 2021.
At the same time, Phillips 66 created a second 50/50 joint venture to build the Red Oak Pipeline and move oil out of Cushing and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.
Initial service from Cushing to the Gulf Coast is targeted to begin in the first quarter of 2021 at the earliest.
The Red Oak joint venture will lease capacity in Plains’ Sunrise Pipeline system, which extends from Midland to Wichita Falls, Texas. The joint venture plans to construct a new 30-inch pipeline from Cushing to Wichita Falls and Sealy, Texas. From Sealy, the joint venture will construct a 30-inch pipeline segment to Corpus Christi and Ingleside and a 20-inch pipeline segment to Houston and Beaumont. Where feasible, Red Oak will utilize existing pipeline and utility corridors and advanced construction techniques to limit environmental and community impact. Plains will lead project construction on behalf of the joint venture, and Phillips 66 will operate the pipeline. The project is expected to cost approximately $2.5 billion.
Phillips 66 will take the lead in the construction of the Liberty Pipeline and the two companies hope to have initial service available in the first quarter of 2021.
From Cushing, shippers will be able to access multiple Gulf Coast destinations, including Corpus Christi, Ingleside, and Houston, Texas. Liberty is underpinned with long-term shipper volume commitments.
“The Liberty Pipeline presents us with a great opportunity to serve producers in the growing Bakken and Rockies production areas,” said Greg Garland, chairman and CEO of Phillips 66. “The pipeline adds to our integrated infrastructure network that serves the key shale oil producing regions with connectivity to major Gulf Coast market centers. Our pipeline network has strategic alignment with our Central Corridor and Gulf Coast refineries, further enhancing value across our assets.”
“The Liberty Pipeline is an important undertaking on the part of our company to ensure that oil from Wyoming, the Rockies and the Bakken can get to markets in the U.S. and around the world,” said Hank True, president of Bridger Pipeline LLC.