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.”


Open Season Launched for Phillips 66 Proposed Pipelines

Phillips 66 launched open seasons for the newly proposed Red Oak pipeline and Liberty pipeline.

Both projects will be joint ventures with Bridger Pipeline LLC and will deliver crude oil to the Texas Gulf Coast.

The Liberty Pipeline will start in the Rocky Mountains and Bakken Formation production areas and end in Corpus Christi, Texas and will have an initial throughput capacity of 350,000 barrels per day with potential to expand further depending on shipper interest, per the release.

The Red Oak Pipeline will run from Cushing, Oklahoma, to Corpus Christi, Houston and Beaumont, Texas and will have 400,000 bpd capacity while also possibly expanding depending on interest.

Biz Journals

Energy Transfer to Team Up with Multiple Companies and Build 600 Mile Permian Pipeline

Energy Transfer Partners is teaming up with Magellan Midsteam Partners and others as they plan a new 600-mile Permian pipeline system to Houston.

Dallas-based Energy Transfer and Oklahoma’s Megellan said they have partnered with Israel’s Delek Group and Ohio-based MPLX, which is the pipeline arm of Marathon Petroleum, to fund the construction of the multibillion-dollar pipeline project. They have confirmed that they have enough customer support to move forward.

The new partnership adds another project to the race to build crude oil pipelines from West Texas’ booming Permian Basin to refining and export hubs in Houston, Corpus Christi, and Beaumont.

Due to the lack of pipelines carrying oil, Permian oil drilling and well completions are slowing down. Until new pipelines start coming in the middle of 2019, companies are relying on trucks and trains to move crude.

The pipeline would come online in mid-2020 and would stretch to Magellan’s East Houston terminal and to Energy Transfer’s Nederland terminal near Beaumont.


Colonial Pipeline, Enterprise Products Partners Teaming Up for Fuel Exports from Beaumont Terminal

Colonial Pipeline and Enterprise Products Partners are teaming up to boost exports from the Beaumont refined oil products terminal in Texas to rival the Houston Ship Channel.

Colonial Pipeline is offering marine logistic services and access to as much as 2 million barrels of new storage at Enterprise's facility in Beaumont. Colonial's shippers will be able to move fuel from 13 Gulf Coast refineries to the Beaumont terminal.

The Colonial Pipeline transports more than 3 million barrels per day of gasoline, diesel, and other fuel from the Gulf Coast to the northeast, making it the largest refined products system in the U.S.

International demand for refined products has been on the rise, causing U.S. exports to surge.


Exxon Expanding Plastics Plant, Creating New Jobs

Exxon Mobil announced Monday it is expanding its Beaumont polyethylene chemical plant, increasing its capacity by 65 percent and creating an additional 1,400 construction jobs and 40 permanent jobs.

The expansion is a result of an increased demand of plastics and the abundant supply of cheap U.S. shale gas.

Construction on the new unit and expansion has already started and should be complete in 2019. According to Exxon, the expansion will generate $20 billion in economic activity in the unit’s first 13 years of operation.

The new unit will increase the current polyethylene production capacity of 1 million metric tons per year by another 650,000.

Fuel Fix