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

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