Philips 66 Enters Joint Venture to Build $2.5 Billion Red Oak Pipeline

Phillips 66 has teamed up with Plains All American Pipeline LP to construct the $2.5 billion Red Oak Pipeline system that will deliver crude oil from Cushing, Oklahoma, and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.

The plan is to build a 30-inch pipeline from Cushing to Wichita Falls and Sealy, Texas. It also will build a 30-inch pipeline segment from Sealy to Corpus Christi and Ingleside and a 20-inch pipeline segment from Sealy to Houston and Beaumont.

The company expects to commence initial service as early as the first quarter of 2021. As per the release, Plains will handle project construction and Phillips 66 will operate the pipeline.

“Red Oak represents a capital-efficient industry solution that will utilize existing assets and provide pull-through benefits to our systems,” Willie Chiang, CEO of Plains All American, said in the release. “We look forward to working closely with Phillips 66 and our committed shippers to bring Red Oak into service and further optimize our assets upstream and downstream of the new pipeline system. We also look forward to creating jobs and supporting economic growth in Oklahoma and Texas.”


Plains Cactus II Crude Pipeline Rate Structure Receives Partial Approval

The rate structure and terms of service for Plains All American Pipeline LP’s Cactus II crude line recieved partial approval from U.S. energy regulators on Monday. The Cactus II crude pipeline runs from the Permian basin to the Corpus Christi, Texas area.

The regulators approved most conditions put forth by Plains. However they declined to approve a request for the option to hold another open season to solicit shipper commitments for up to 90 percent of the pipeline’s capacity upon the expiration or early termination of service agreements.

The 585,000 barrels per day Cactus II line is expected to begin service in the third quarter and will connect the Permian basin to the Gulf Coast.


Two Companies Joining Forces to Expand Red River Pipeline

Plains All American Pipeline has entered into a joint venture with Delek US, a Tennessee refining company, to increase the capacity of its 350 mile Red River Pipeline in Oklahoma and northeast Texas, the company said in a statement.

The pipeline runs between Cushing, Okla., and Longview, Texas. The plan is to boost pumping capacity along the pipeline from 150,000 barrels per day to approximately 235,000 barrels per day by the first half of 2020.

Delek is already a customer of the Red River Pipeline and is boosting its capacity on the Red River system from the current level of 35,000 barrels per day to 100,000 barrels per day. It agreed to pay $128 million to buy a 33 percent stake in a new joint venture named Red River Pipeline Co.

"This is a win-win deal that fits our strategy of optimizing and expanding existing systems while exercising capital discipline," Plains All American Executive Vice President Jeremy Goebel said in a statement. "This transaction expands long-term alignment with a natural shipper, supports and funds the expansion of the system, increases Plains' net committed annual cash flow, and provides proceeds to fund our capital program or lower debt."


Cactus II Pipeline Tariff Waiver Request Denied

A new request to remove import tariffs on steel for Plains All American's Cactus II crude oil pipeline system got rejected by the Trump administration.

The U.S. Commerce Department had already denied Cactus II's similar request last year, citing the same reason that the waiver request was not a "complete submission". The company requested to waive import tariffs on hundreds of miles of steel pipeline imported from Greece.

The 25% steel import tariff announced in March 2018. The department has rejected waivers for 517.6K metric tons of steel, while granted waivers for 153.7K metric tons of steel, Argus reports.

Although, majority of requests from the oil and gas industry to win exemptions was lost to Department of Commerce, the department lifted the tariff on pipeline that Cheniere had proposed to import from Canada for its planned 1.4 billion cubic feet per day Midship natural gas.


$3.3 Million Fined for Worst Oil Spill in California

Plains All American Pipeline company was fined nearly $3.35 million on Thursday for causing the 2015 spill that sent 140,000 gallons of crude oil gushing onto Refugio State Beach in Santa Barbara County.

The spill, considered as the worst California coastal spill in 25 years caused from a corroded pipeline that blackened popular beaches for miles, killed wildlife, affected tourism and fishing, including killing marine mammals and protected sea birds.

According to federal inspectors Plains had made several preventable errors, failed to quickly detect the pipeline rupture and responded too slowly as oil flowed toward the ocean.

“We take our responsibility to safely deliver energy resources very seriously, and we are committed to doing the right thing,” the firm said in a statement Thursday and had paid $335 million for the cleanup according to the company’s 2017 annual report.


Partial Service on Plain’s Cactus II Pipeline Expected to Start in Q3

Cactus II pipeline construction from the Permian Basin to Corpus Christi, Texas, is on schedule, said Plains All American Chief Executive Officer Willie Chiang during an earnings call late on Tuesday. Also the partial service to Ingleside is expected to be completed in the third quarter of 2019.

“We are at full speed ahead on progressing the project ... the pipe’s been ordered,” Chiang said, adding that discussions with additional potential shippers is ongoing.

He added that the full service on the Cactus II pipeline is expected by the first quarter of 2020. Another pipeline from the Delaware Basin, called the Wink-to-Webster project, is targeted to be placed into service in the first half of 2021, which is expected to have a capacity of more than 1 million barrels per day.


Moda Midstream Planning to Build a Second Supertanker Berth to Handle Three New Pipelines

An expansion project to build a second berth to accommodate supertankers is in consideration by Moda Midstream LLC at its crude export terminal in Ingleside, Texas, the company’s CEO Bo McCall said on Thursday.

As three major pipelines by Plains All American Pipeline LP, EPIC Crude Pipeline LP and Enbridge Inc., starts service, the expansion to the terminal is necessary. Also the company is increasing the facility’s crude storage capacity from 2 million to 12 million barrels.

“When these new pipelines come online, there is going to be close to 3.5 million barrels a day coming into the market,” McCall said. In order to handle other types of tankers, Moda is also studying the feasibility of building an additional pier with two more berths, McCall said.

Moda’s loading ability per supertanker will rise to 1.5 million barrels once the U.S. Army Corps of Engineers approves the contract this year to dredge the Corpus Christi ship channel to the Ingleside facility to a depth of 54 feet from 47 feet.


Plains, Exxon, Lotus Team Up for 650-Mile West Texas to Houston Pipeline

Plains All American Pipeline, Exxon Mobil and Lotus Midstream LLC finalized a joint venture to start a 650-mile pipeline project, per an announcement on Wednesday.

The companies are planning to build the 650-mile project using 36-inch-diameter pipe to carry more than 1 million barrels of oil and condensate per day. Analysts believe the project costs will be in the $2 billion region.

Pipeline capacity has caused a problem for companies needing to move their product to market in the Gulf, but the Wink-to-Webster pipeline looks to help alleviate some of those issues.

The companies said that the pipeline operator Plains will lead the construction of the pipeline, which will start operations in the first half of 2021.


Lotus, Exxon and Plains All American to Team up on Multibillion-dollar Pipeline System

Lotus Midstream, backed by the San Antonio private equity firm EnCap Flatrock Midstream, plans to join Exxon Mobil and Houston’s Plains All American to construct a multibillion-dollar crude oil pipeline system from West Texas to Houston and Beaumont.

Lotus Midstream was formed earlier this year, and made waves a month ago as they announced their agreement to purchase a Texas pipeline system, the Centurion pipeline system, from Occidental Petroleum.

Lotus is planning to create a formal joint venture with Exxon and Plains who announced the pipeline in June.

Earlier this year, Exxon announced its intentions to triple its Permian oil and gas production by 2025.

Plains and Magellan Midstream Partners of Oklahoma recently expanded their BridgeTex oil pipeline. The BridgeTex serves as the major artery from West Texas to the Houston region.

Houston Chronicle

Plains All American Face Criminal Charges After California Spill

A California jury on Friday found Plains All American Pipeline company guilty on criminal charges from a major oil spill three years ago along the Pacific shoreline near Santa Barbara.

The spill ranks as the largest in more than four decades to hit the northwest coast of Los Angeles.

Crude oil gushed onto Refugio State Beach shores and into the Pacific after an underground pipeline badly worn by corrosion ruptured along a coastal highway west of Santa Barbara on May 19, 2015. Hundreds of sea bird and marine mammals died because of the spill.

The company estimated as much as 3,400 barrels of crude oil escaped into the environment at the edge of a national marine sanctuary and state-designated underwater preserve rich in marine life.

The company faces at least $1.5 million in penalties if Friday’s conviction is sustained  according to a chief deputy district attorney for Santa Barbara County.

The penalty is a small fraction of the $150 million that Plains said it had spent on spill response and cleanup costs by the time the criminal case was brought in 2016.

Plains was convicted of discharging crude oil into state waters, a felony, and for eight misdemeanor offenses, including the failure to immediately report the spill, the chief deputy district attorney added.

One of Plains’ employees, an environmental and regulatory compliance specialist, was originally charged in the case as well, but those charges, and dozens of others against the company, were dismissed before the trial.

The court specifically found the company at fault for failing to protect the pipeline from corrosion as well as failing to detect and report spills immediately.


Plains All American Controls Fire and Resumes Operations of Wichita Falls Crude Storage Tank

Plains All American Pipeline said on Wednesday that the fire on a crude storage tank east of Wichita Falls, Texas was extinguished. Initially, the company did not specify if other operations were affected by the fire but the terminal and connecting pipelines have resumed operations.

Tuesday morning’s fire broke out on a roof seal of a crude oil storage tank at the Wichita Falls Station and was extinguished around midnight, the company said in a statement.

Wichita Falls is a crude injection point in north Texas along Plain’s Basin Pipeline. It runs from the Permian Basin to the oil storage hub at Cushing, Okla.

The pipeline was flowing at a rate of nearly 409,000 barrels per day at the time it was shut after decreasing in power consumption around 7:00 A.M. ET on Tuesday. It has a capacity of 450,000 bpd.


Flames Break Out at Plains All American Wichita Falls Station

A single crude storage tank at the Plains All American Pipeline Wichita Falls Station broke out into flames on Tuesday morning, the company said.

Personnel and contractors were accounted for, according to the company. It is unclear whether or not there have been any injuries despite first responders being on site.

The company did not specify if other operations were affected by the fire.

Wichita Falls is a crude injection point in north Texas along Plain’s Basin Pipeline. It runs from the Permian Basin to the oil storage hub at Cushing, Okla.

The pipeline was flowing at a rate of nearly 409,000 barrels per day at the time it was shut after decreasing in power consumption around 7:00 A.M. ET, market intelligence firm Genscape said in a notice.

The Basin pipeline has a capacity of 450,000 bpd, Genscape said.

“Plains really hasn’t said much to the shippers so unless it’s going to be shut for a while, I don’t think there’ll be much market impact,” said one trader who buys oil off the pipeline.

Plains did not respond to a request for comment on the Basin pipeline closure.


Steel-Import Tariffs Result in Major U.S. Oil Pipeline Companies Seeking Exemptions

Major oil pipeline companies are worried that the high cost of importing steel due to the Trump administration’s new tariffs will increase oil prices, among other problems.

Companies have specific steel requirements and seek manufacturers who can meet those requirements within a timeline constraint, all while ensuring the required volume is met.

Most companies are arguing that without the specific capabilities of select steel manufacturers in countries like Turkey, who has a manufacturer for Kinder Morgan, it would be increasingly difficult to maintain production volume without sacrificing current production schedules.

Analysts warn a bottleneck of crude could force some producers to shut down production.

A Japanese steel provider helps oil and gas producer Hess guarantee corrosion resistance in deepwater operations, which is something Hess would not be able to do if it had to find a different provider.

Benchmark steel oil prices have increased 50 percent since last year, and with 77 percent of steel used in pipelines being imported, over 500 petitions have been submitted for exclusions and exemptions from steel-import tariffs.

Initial decisions are expected to be made this month.


Exxon Mobil, Plains All American Plan Pipeline Project in Permian

Exxon Mobil is planning to build hundred of miles of pipeline in a joint venture with Houston’s Plains All American Pipeline that would stretch from west of Midland to the Houston and Beaumont areas.

The multibillion dollar pipeline network will be designed to deliver crude oil from the Permian Basin to refining and port hubs near Houston.

This news comes after an early 2018 statement by Exxon that said it plans to triple production in the Permian by 2025.

Despite the proposed project, lack of pipelines in the prolific Permian is creating increasing bottlenecks in the area and could hamper growth as well as cause discounts on Permian-produced oil.

With Permian oil production at a record high and rapidly increasing, Plains and Oklahoma-based Magellan Midstream Partners expanded their BridgeTex oil pipeline from West Texas to the Houston region.


Owners of Capline Pipeline Explore Interest in Pipeline Reversal With Open Season

Pipeline operators Plains All American Pipeline, Marathon Petroleum, and BP Oil Pipeline Co are launching a non-binding open season to receive shipper interest in its proposed reversal of the Capline pipeline that moves crude from St. James, Louisiana to Patoka, Illinois.

If the open season is successful and the operators decide to continue with its proposal, the reverse flow could be operational by the second half of 2022. The reversed Capline pipeline would initially have a capacity of 300,000 barrels per day and would be able to receive crude from connecting carriers at Patoka.

Marathon Pipe Line operates the pipeline and owns the asset along with Plains All American Pipeline and BP Oil Pipeline Co.

The open season will be held through November 17, 2017.

Oil & Gas Journal

Plains All American Pipeline Continues Cleanup of 19,000-Gallon Oil Spill

Crews from Plains All American Pipeline are working to clean up a 19,000-gallon oil spill that was reported northwest of Oklahoma City on Friday.

Although the pipeline spill was reported Friday, the actual start date of the spill is currently unknown. Plains All American Pipeline issued a statement Tuesday saying it was still investigating the cause of the leak.

Officials believe corrosion may have caused a small hole in the pipeline, resulting in the leak.

According to the Oklahoma Corporation Commission, about 70 acres of farmland were affected by the 450-barrel spill, and the oil also reached a small creek but was contained before flowing into a second creek that runs into the Cimarron River.

The commission said it would work with the EPA to test the water quality in the affected waterways to ensure they are fully recovered before signing off on the cleanup process.

Houston Chronicle

Plains All American to Expand Capacity on its Cactus Pipeline

Plains All American Pipeline announced on Wednesday it is expanding capacity on a 70-mile section of its West Texas Cactus pipeline to about 390,000 barrels per day.

This expansion will allow Plains to move increasing product volumes from the Permian Basin to Corpus Christi and other deliver points along the system, according to the company's announcement.

The Cactus pipeline is a 310-mile crude oil pipeline that runs from the Permian Basin and connects to the Plains All American/Enterprise Products Partners Eagle Ford Joint Venture pipeline.

Plains said it expects to complete the expansion in the third quarter of 2017.

Plains All American Pipeline
Fuel Fix

Diamond Pipeline Receives Approval from Arkansas Public Service Commission

Planned Diamond Pipeline Route ( Diamond Pipeline LLC )

Planned Diamond Pipeline Route (Diamond Pipeline LLC)

Diamond Pipeline LLC has received approval from the Arkansas Public Service Commission to build its 440-mile crude oil pipeline across five intrastate waterways, including the Arkansas and Mississippi rivers.

The commission filed its approval on August 31, a decision made after Diamond Pipeline settled a $6.6-million deal with Clarksville Light and Water Company last month to resolve conflict the utility had about the proposed pipeline pathway.

Under the deal, Diamond Pipeline will extend a pipe that feeds a water-intake facility that is north of the oil pipeline’s route, helping keep waterways safe from contamination.

The $900-million pipeline is a joint venture between Plains All American Pipeline and Valero Energy Corporation. It will move oil from Cushing, Oklahoma, to Valero’s refinery in Memphis, Tennessee and have a capacity of 200,000 barrels per day.

Construction is planned to start this year and finish in 2017.

Arkansas Online

Protestors Express Opposition to Plains All American Pipeline Permit

Lake Thunderbird in Norman, Oklahoma   (TravelOK)

Lake Thunderbird in Norman, Oklahoma (TravelOK)

Protestors expressed their opposition outside of Norman City Hall on Wednesday when the board ruled not to appeal a permit granted to Plains All American Pipeline for its Red River Pipeline in Oklahoma.

“This is about water quality. This is about protecting wildlife. This is about combating systemic environmental racism,” protest organizer Casey Holcomb told a local news source.

Tribe leaders and members also attended the protest and explained they do not want the pipeline running through their sacred land.

Plains All American sent a statement to News Channel 4 saying it is “committed to designing, constructing, operating and maintaining the Red River Pipeline in a safe and reliable manner, meeting or exceeding the required safety, design, and construction and operating standards.”

The company also noted that the route selected was meant to minimize impact to the environment.

The anti-pipeline group “Stop the Plains All American Pipeline” said it plans to appeal the board’s decision to allow a permit for a stream crossing east of the Lake Thunderbird Dam.

FOX 25 News
News Channel 4

Welspun Tubular Granted $47 Million to Construct Diamond Pipeline

Planned Diamond Pipeline Route via

Welspun Tubular announced that it received a $47-million order to help construct the Diamond Pipeline, which will run for 440 miles from Cushing, Oklahoma to Memphis, Tennessee.

According to Welspun and Diamond Pipeline LLC, the order makes up about two-thirds of the pipe needed to build the entire line.

The $900-million pipeline will be able to transport 200,000 barrels per day of crude oil from Cushing to Valero’s refinery in Memphis.

Diamond Pipeline LLC is a joint venture between Plains All American Pipeline and Valero.

Welspun Tubular is a pipe manufacturer that has facilities near the Little Rock Port in Arkansas.

The pipeline construction has an anticipated completion date of 2017.

Houston Chronicle
Welspun Tubular
Diamond Pipeline