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.


Kinder Morgan Moves Forward with South Texas Pipeline Connection

Kinder Morgan Inc., announced on Wednesday that the company will go ahead with the South Texas pipeline connection that would transport crude from Phillips 66’s Gray Oak pipeline in the Permian Basin to delivery points at the Houston Ship Channel.

“We wanted to find a way to get Permian barrels to KMCC (Kinder Morgan Crude and Condensate pipeline),” which delivers crude from the Eagle Ford Shale in South Texas to Houston Ship Channel destinations, Chief Executive Officer Steven Kean said.

Kinder Morgan and Phillips 66 began soliciting shipper commitments for the connection in February. The company plans to spend $10 million on the project this year and expects the connection could carry 100,000 barrels per day.

The service is expected to begin by the end of 2019 and has contracts to start transporting 75,000 barrels per day for up to three years. The company is also considering converting an underutilized natural gas pipeline to carry crude from the Bakken shale in North Dakota and the Denver-Julesburg basin in Colorado.


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.

Houston Chronicle

Flint Hills May Sell Their Texas Crude Export Terminal

U.S. oil refiner, Flint Hills Resources, recently hired JP Morgan Chase to assist in marketing the assets of their crude export terminal in Ingleside, Texas. Flint Hills is considering finding a partner for the operation or simply selling it on its own. The terminal is a connecting point for several pipelines, including some owned by Phillips 66 and Plains All American Pipeline LP.

Andy Saenz stated, “we want to understand how the market values the asset and whether there is an opportunity to utilize the terminal better than we are today.”

Flint Hills has shared that they are growing storage capacity at Ingleside terminal by 1 million barrels to 3.5 million and have raised the site's vessel loading capacity from 200,000 barrels per day to 380,000 barrels per day.


Phillips 66 Plans to Build an Offshore Crude Oil Export Terminal

Phillips 66 plans to seek permission to build an offshore crude oil export terminal near Corpus Christi. The plan is to build two offshore buoys about 27 miles east of Port Aransas, which will be supported by two underwater 30-inch crude oil pipeline. If approved, Phillips 66 would be the operator of the proposed project.

As per the plan, Bluewater Texas Terminal LLC, a Phillips 66 subsidiary, started contacting public officials about the offshore project earlier this month. The offshore terminal will be able to accommodate Very Large Crude Carriers, or VLCCs, which can haul up to 2 million barrels of crude oil in a single shipment.

The proposed project would require approval from the U.S. Maritime Administration, Texas Commission on Environmental Quality and other agencies, and in a statement, Phillips 66 reported that it is working with the Port of Corpus Christi to develop the project.

"Phillips 66 has decades of experience safely and responsibly operating similar single point mooring systems and other marine loading facilities," the company said in a statement. "Bluewater Texas would provide U.S. oil producers another outlet for their increasing volumes while also potentially reducing the need for reverse lightering and the environmental impact that those operations have on a regional level."


Two Companies Joining Forces to Construct $1.6 Billion Liberty Pipeline

A 50/50 joint venture between Phillips 66 and Bridger Pipeline LLC has formed and the companies will be proceeding with the construction of the 24 inch Liberty Pipeline. The pipeline is expected to cost approximately US$1.6 billion and will provide crude oil transportation services from the Rockies and Bakken production areas to Cushing, Oklahoma.

Subject to receipt of applicable permits and regulatory approvals, initial service on the pipeline is targeted to commence as early as the first quarter of 2021. Phillips 66 will handle both project construction and operating the pipeline.

“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.”


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 Announced for Bayou Bridge Pipeline System

Bayou Bridge Pipeline, LLC, a joint venture owned by subsidiaries of Energy Transfer and Phillips 66 Partners recently announced a non-binding expansion open season that commenced at 1 pm CT on 22 April 2019 to solicit shipper interest for expanded joint tariff transportation service received from certain connecting carriers onto the Bayou Bridge Pipeline System.

Energy Transfer owns 60% and Phillips 66 Partners owns 40% of the Bayou Bridge Pipeline system. It is operated by a wholly owned subsidiary of Energy Transfer Operating, L.P. Bayou Bridge is evaluating joint tariff service from origin points in the Bakken/Three Forks Region in North Dakota; Patoka, Illinois; the Powder River Basin in Wyoming; the DJ Basin in Colorado; Cushing, Oklahoma; and the Permian Basin.

Bayou Bridge also continues to evaluate additional Southern Louisiana destination points to increase options for shippers on the system,in addition to the routes that are the subject of this non-binding expansion open season. Bayou Bridge will hold a binding expansion open season to finalize committed subscriptions, following the confirmation of shipper interest.


Open Season for Kinder Morgan and Phillips' 850-Mile Gray Oak Pipeline Announced

Phillips 66 and Kinder Morgan Inc., announced an open season on Monday for shipper commitments for its Gray Oak Pipeline.

The Gray Oak Pipeline stretches from the Permian Basin to delivery points at or near the Houston Ship Channel and capable for crude deliveries of 900,000 barrel per day.

According to an analyst, The Gray Oak Pipeline could help alleviate a crude oil transportation bottleneck in the Permian Basin of West Texas and New Mexico.

Through a connection in South Texas, The Gray Oak Pipeline would deliver crude to the Houston area.


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

Phillips 66 and Bridger Pipeline Announce New Pipeline Plans

Phillips 66 and Bridger Pipeline announced preliminary plans of a new pipeline to send Bakken crude oil to Texas.

350,000 bpd of oil would travel from the Bakken and Rockies production areas to Corpus Christi, Texas on the Liberty Pipeline.

Interest from shippers will determine the final pipeline route, Bridger Pipeline’s spokesman said. He also said that, “There’s a need for more crude oil pipeline capacity from both North Dakota and Wyoming”.

The project intends to combine new construction with expansions to existing pipes.

The pipeline is expected to be operational by the end of 2020 if plans materialize and regulatory approval is given.

Pipeline & Gas Journal


Phillips 66 Partners to Move Forward with Gray Oak Pipeline in West Texas

Phillips 66 Partners said it has received enough commitments from oil producers in West Texas' Permian Basin to move forward with its Gray Oak crude oil pipeline.

The Gray Oak Pipeline will carry crude from West Texas to markets in Corpus Christi, Sweeny, and Freeport in South Texas, according to the Houston-based company.

The pipeline, which could have a capacity of 700,000 barrels per day starting by the end of 2019, will have the potential to expand capacity to about 1 million barrels per day if it becomes fully subscribed.

Gray Oak will connect to a new marine terminal being built by Buckeye Partners, Phillips 66, and Andeavor.

Phillips 66 owns 75 of the project while Andeavor owns 25 percent.

Fuel Fix

Phillips 66 Plans Crude Oil Pipeline from St. James to Serve Louisiana Refineries

Phillips 66 is in talks to build a 94-mile crude oil pipeline from St. James to Louisiana refineries so as to provide them with new access to U.S.-produced crude oil.

The proposed Ace Pipeline would reduce reliance on foreign crude and keep state refineries competitive in the global market for energy projects, the company wrote in a summary.

The pipeline would run to the Phillips 66 Alliance Refinery in Plaquemines Parish and cross the Mississippi River to also serve refineries in St. Bernard Parish.

The proposed route crosses several wetlands as well as Lake Salvador, but Phillips 66 says the pipeline route would be within existing pipeline corridors.

The company expects the pipeline to be in service 12 to 18 months after permits are acquired. The target date for permit submittal is mid-2018.

Phillips 66 also owns 40 percent of the controversial 162-mile Bayou Bridge crude oil pipeline that is currently under construction. The pipeline, which is 60 percent owned by Energy Transfer Partners, is being fought against by local environmentalists and fishermen who oppose the route through the Atchafalaya Basin in southern Louisiana.

The Times-Picayune

Phillips 66 Partners With Tech Company to Develop Advanced Pipeline Integrity Management SaaS Solution

OneBridge Solutions is teaming up with Phillips 66 to create a pipeline integrity management cloud application designed to enable pipeline operators to manage their assets as smart infrastructure.

The application will be created by migrating Phillip 66's current pipeline data management system to a cloud-based software-as-a-service (SaaS) solution and integrating Machine Learning and other technologies into the app.

OneBridge, a subsidiary of OneSoft Solutions, said the development project with Phillips 66 is an important milestone for the company as it is now fulfilling its vision of developing a cloud application that enables pipeline operators to manage their pipeline assets as smart infrastructure.

OneBridge's Cognitive Integrity Management (CIM) solution made the objective achievable, according to the company, and it hopes to help advance Phillips 66's pipeline integrity platform as well as eventually provide solutions for pipeline operators that wish to accelerate their digital transformation.


Phillips 66, Enbridge Partner to Build Massive Oil Pipeline in Permian

Phillips 66 and Enbridge are teaming up to build a crude oil pipeline from the Permian Basin to export and refining hubs near Corpus Christi, Houston, and Freeport, the companies announced Monday.

Houston-based Phillips 66 and Canada's Enbridge are soliciting interest this week from shipping customers and will finalize plans for the proposed Gray Oak Pipeline once they receive customer feedback and interest.

The Gray Oak Pipeline is expected to transport 385,000 barrels of oil a day with the potential to expand. It is estimated to be complete by late 2019.

The partnership between Phillips 66 and Enbridge offers this project plenty of experience and funding to make it possible, as Phillips 66 is one of the country's biggest refining and pipeline giants, and Enbridge has recently become North America's largest pipeline company after acquiring Spectra Energy earlier this year.

Fuel Fix

Targa Resources Teams Up With Kinder Morgan on 430-Mile NatGas Pipeline

Targa Resources and Kinder Morgan are working together to build the 430-mile Gulf Coast Express natural gas pipeline from the Permian Basin to Corpus Christi.

The project is being led by Kinder Morgan, and Targa Resources is buying a 25 percent stake while also selling 25 percent of its proposed Grand Prix natural gas liquids pipeline project to equity firm Blackstone Energy Partners.

Kinder Morgan will own 50 percent of the Gulf Coast Express Pipeline, and DCP Midstream has the remaining 25 percent.

The project is expected to be complete by late 2019.

DCP Midstream was founded by Phillips 66 and Spectra Energy. Enbridge acquired Spectra Energy this year, so it now also owns DCP Midstream with Phillips 66.

Houston Chronicle


U.S. Department of Energy Releases 1 Million Barrels of Crude from Strategic Petroleum Reserve Post Harvey Destruction

The U.S. Energy Department is releasing a second batch of oil from its Strategic Petroleum Reserve totaling 1 million barrels due to Tropical Storm Harvey’s disruption of the petroleum industry, the department announced Thursday.

Oil will be delivered to the Phillips 66 refinery in Lake Charles, Louisiana. The refinery is still in good condition as a result of the unprecedented storm that flood the Gulf Coast and other areas of Texas.

400,000 barrels of sweet crude and 600,000 barrels of sour crude will be sent via pipeline to the refinery. Phillips 66 is required to replace the oil at a later date.

The Strategic Petroleum Reserve currently holds 679 million barrels of oil. This is the first tapping of the reserve since an emergency in 2012.

The Energy Department said it would continue to provide help as necessary and will also continue to assess requests for crude oil from the reserve.

Tropical Storm Harvey dumped more than four feet of rain on southeastern Texas and caused the shutdown of nearly a quarter of the country’s refining output.


Phillips 66: Pipelines, Chemicals to Hold More Promise for Company than Gasoline

Two executives at Phillips 66 said last week that they see financial promise in the company's midstream and chemical business and are waning from the gasoline business.

Arguing that gasoline demand is on a decline, Phillips 66 CEO Greg Garland said at the company's annual shareholder meeting last Wednesday that the company sees "better value creation in the midstream and chemicals business" and that "the Middle East and U.S. Gulf Coast are going to be two best places in the world to make petrochemicals, long-term."

"In 10 years, if we're driving the same, we're going to see less need for transportation fuel," said Garland, adding that millennials are driving less and using ride-share companies more. He also mentioned that cars are becoming more fuel efficient.

As gas demand declines in the U.S., the shale boom is unleashing a large amount of natural gas, a building block for petrochemicals. The U.S. can produce natural gas at some of the cheapest costs in the world, and companies who invest in that can "compete with anybody, any place in the world," according to Garland.

Fuel Fix

Phillips 66 to Build 130-Mile Rodeo Pipeline in Booming Permian Basin

Energy and logistics company Phillips 66 on Thursday announced its plan to build a crude oil pipeline in West Texas' Permian Basin in efforts to take advantage of the area's boom.

The Reeves-Odessa Origination Project, or Rodeo pipeline for short, would transport oil from the Delaware Basin portion of the Permian, running from Reeves County to terminals in the Odessa-Midland area.

The main line would be 130 miles long, not including various laterals constructed off the line. It would initially carry 130,000 barrels of crude per day and work up to 450,000 barrels per day.

Phillips 66 says the project is estimated for completion in the second half of next year. The company announced an open season to secure binding commitments from prospective shippers.

Phillips 66
Fuel Fix

Energy Transfer Completes $2 Billion Stakes Sale in Dakota Access Pipeline

Dakota Access Pipeline builder Energy Transfer Partners completed its $2 billion sale of stakes in the oil pipeline after the U.S. Army Corps of Engineers granted its regulatory approval for the company to complete construction on the line.

Energy Transfer Partners sold a 27.6 percent share of the pipeline to Enbridge and a 9.2 percent share to Marathon Petroleum. The total $2 billion stakes sale for the roughly $4 billion pipeline leaves Energy Transfer Partners with a 38.25 percent stake in the pipeline and Phillips 66 with its 25 percent stake.

The sale had been announced months ago but was put on hold while the Dakota Access Pipeline was halted due to regulatory reviews under the Obama administration. Since then, the Army Corps under the Trump administration has reversed the regulatory holdups, and construction has restarted.

Energy Transfer Partners said it will use the money from the stakes sale for debt reduction.

Fuel Fix