Pipeline giants Energy Transfer Partners, Magellan Midstream Partners and others are teaming up on a new, 600-mile Permian pipeline system to Houston.
Dallas-based Energy Transfer and Oklahoma’s Magellan said they’ve 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 said they have enough customer support to move forward.
Oil drilling and well completions activities are slowing in the Permian because of the lack of pipelines to carry the oil. More companies are relying on trucks and trains to move the crude until new pipelines start coming online in the middle of 2019.
This new Permian Gulf Coast project would stretch to Magellan’s East Houston terminal and to Energy Transfer’s Nederland terminal near Beaumont. The pipeline would come online in mid-2020, according to the companies.
This summer, Exxon Mobil even said it’s entering the Permian pipeline race by partnering with Houston’s Plains All American Pipeline to build its own crude pipeline to Houston.
Likewise, Houston’s Enterprise Products Partners recently completed its 416-mile Midland-to-Sealy crude pipeline into the Houston area.
Most of the other major crude pipeline projects are directed toward Corpus Christi, where the port is becoming a hub for crude oil exports.
Plains, which currently owns the only major pipeline that runs from the Permian to Corpus Christi, also plans to complete a pipeline system – Cactus II – by late 2019.
As for other projects, San Antonio-based EPIC Midstream Holdings is moving forward with the 730-mile EPIC Crude Oil Pipeline projects to carry oil and natural gas liquids from the Permian to Corpus.
Likewise, Houston’s Phillips 66 said it is moving forward with its planned Gray Oak Pipeline to carry crude from West Texas to Corpus Christi, Sweeny and Freeport.
But the Houston company Buckeye Partners recently canceled its proposed South Texas Gateway oil pipeline from West Texas to Corpus and the Houston Ship Channel.
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