New Permian Pipeline to Gulf Coast Ships First Crude

San Antonio-based EPIC Midstream Holdings Inc., began shipping crude oil on its 400,000 barrel per day pipeline from the Permian Basin to the U.S. Gulf Coast on Thursday. EPIC is the second pipeline operator this year to open a major line from the top U.S. oil field to the Corpus Christi, Texas, area.

Plains All American Pipeline LP’s 670,000 barrel per day Cactus II pipeline stated its initial operations this week. Both new pipelines will help alleviate a crude oil bottleneck that has weighed on prices in the Permian of West Texas and New Mexico for more than a year.

Terminal operator Moda Midstream LLC confirmed it would be accepting the Permian crude from the EPIC line at its facility in Ingleside, Texas, by Friday. Oil prices in Midland, the heart of the Permian shale field, rallied to 50 cents per barrel over U.S. crude futures.

Source:
reuters

Permian Crude Shipment Started on Cactus II Pipeline

Crude oil shipments started from Permian basin to the Buckeye Texas Partners oil hub in Corpus Christi through the new Cactus II pipeline system, Global commodities trader Trafigura AG said on Monday.

A long-term agreement between Trafigura and the pipeline operator, Plains All American Pipeline LP was signed last year to transport a total of 300,000 barrels per day of crude and condensate on the Cactus II pipeline, which has a capacity of 670,000 barrels per day.

The Cactus II pipeline is expected to alleviate a bottleneck that had depressed regional prices for more than a year. Also the pipeline is first of three large pipelines expected to start up this year from the Permian Basin and the biggest in the United States.

Source:
reuters

Commercial Service on Cactus II Pipeline Will Start Next Week

The new Cactus II crude oil pipeline, owned by Plains All-American, is mechanically complete and will begin commercial service next week, CEO Willie Chiang said. The pipeline will have the capacity to transport 670,000 barrels per day of crude oil from the Permian Basin to the Gulf Coast.

"As of today, the line is approximately 50% filled with crude, and we anticipate entering initial commercial service sometime next week," Chiang said during a conference call with investors to discuss the company's second-quarter financial results. "We expect to have direct Cactus II connectivity to Corpus (Christi) in service by the end of the first quarter 2020."

In-order to ease the bottlenecks that developed as a result of the fast-rising Permian Basin production, Cactus II is one of three new crude oil pipelines scheduled to enter service before the end of the year.

The other two pipelines scheduled for completion this year are the EPIC Crude Oil Pipeline from Orla, Texas, to Corpus Christi and Phillips 66 Gray Oak Pipeline.

According to Chiang, the company has also added new investors to its proposed Wink-to-Webster pipeline and expects to start operations on the project in the first quarter of 2021.

Source:
pgjonline

Cactus II Pipeline’s Unused Space Will Be Given to Committed Shippers

Unused space on Cactus II crude pipeline will be allocated to committed shippers if spot shipments fall below the 10% of capacity set aside for those shipments, Plains All American LP said on Wednesday.

A source familiar with the matter told Reuters last month that once the line fill is complete, full contractual volumes will be shipped by commodities merchant Trafigura. Last year a long-term agreement with Plains was signed by Trafigura to transport a total of 300,000 barrels per day of crude and condensate on the Cactus II pipeline from the Permian basin to the port of Corpus Christi.

Market sources have said that Plains has been scooping up crude barrels in recent weeks to fill the line ahead of the pipeline’s start up. Cactus II project is on track for initial service by the end of the third quarter of 2019, Plains said in June. The 670,000 barrel-per-day Cactus II oil pipeline system runs from the Permian basin to the Corpus Christi, Texas, area. 

Source:
pgjonline

Plains' Canadian Pipeline Expansion Will Connect To Texas

Plains All American has proposed pipeline expansions in Canada, Montana and Wyoming in order to connect to the $2.5 billion Red Oak pipeline system that Houston’s Phillips 66 and Plains are building from Oklahoma to Houston, Beaumont and Corpus Christi. While the Keystone XL pipeline project is still fighting legal battles, these expansions, set to complete in 2021, would allow more Canadian crude oil to reach Houston and the Gulf Coast.

Tyler Rimbey, executive Vice President for Canadian Plains stated, “We remain focused on leveraging our existing systems in creative ways to meet the growing needs of our customers.”

The reasonably priced expansions include Plains’ Western Corridor pipeline in Montana and Wyoming to grow as well as their Rangeland Pipeline, running from Edmonton to the U.S./Canadian border, to increase by 2X.

The Red Oak pipelines will be located from an oil storage hub in Cushing, Oklahoma to Wichita Falls, Texas and handle a mix of Canadian and Texas crude oil. From Wichita Falls, the pipelines should connect to systems from the Permian Basin, then lead towards Sealy and onwards to different refining and port hubs in Corpus Christi, Ingleside, Houston and Beaumont.

Source:
Houston Chronicle

Open Season Announced for Saddlehorn Pipeline Expansion

Saddlehorn Pipeline Company, LLC has announced the expansion of Saddlehorn pipeline and has launched an open season to solicit long-term commitments for capacity on the pipeline system. The company will also add the new Ft. Laramie origin by leasing capacity on third-party pipelines.

The pipeline’s current transportation capacity is 190,000 barrels per day of crude oil and condensate from the DJ and Powder River Basins to storage facilities in Cushing, Oklahoma owned by Magellan and Plains. The expansion will increase pipeline’s capacity by up to 100,000 barrels per day, which will mark a new total capacity of 290,000 barrels per day.

Following the addition of incremental pumping and storage capabilities, the higher capacity is expected to be available in late 2020. The company announced that interested customers must submit binding commitments by 12:00 p.m. Central Time on 31 July, 2019.

Source:
worldpipelines

Cactus II Oil Pipeline to Begin Line Fill in a Week

Plains All American Pipeline LP’s Cactus II oil pipeline system will commence line fill within a week, a source with direct knowledge of the matter said. The Cactus II has the capacity of 670,000 barrel per day and runs from Permian Basin to the Corpus Christi, Texas area.

Cactus II project is progressing on schedule for initial service by the end of the third quarter of 2019, the pipeline operator said last month. Commodities merchant Trafigura signed a long-term agreement with Plains last year to transport a total of 300,000 bpd of crude and condensate on the Cactus II pipeline.

“We have over 90% of the pipe in the ground and we’re working diligently toward completion,” a company executive said during its investor day about two weeks ago. Concho Resources Inc., and Anadarko Petroleum Corp are the other two shippers on the Cactus II line.

Source:
pgjonline

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.”

Source:
bizjournals

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.

Source:
reuters

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."

Source:
chron

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.

Source:
seekingalpha

$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.

Source:
latimes

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.

Source:
reuters

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.

Source:
pgjonline

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.

Source:
Chron

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.

Source:
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.

Source:
Reuters

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.

Source:
Reuters

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.

Source:
Reuters

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.

Source:
Reuters