Shipper commitments sought for proposed Cushing-to-Houston crude oil pipeline
Enterprise Products and Energy Transfer announced on Wednesday the start of a binding open commitment period for available capacity on the proposed crude oil pipeline from Cushing, Oklahoma, to Houston.
The pipeline would be designed and constructed as part of a 50/50 joint venture between the two partnerships.
The 584-mile Double E pipeline would provide up to 450,000 bpd of takeaway capacity for crude oil currently stranded at the Cushing storage hub because of a lack of southbound pipeline infrastructure.
The project would offer shippers greater access to the Gulf coast refining complex, while providing refiners with a reliable, domestic source of crude oil as an alternative to higher priced imported crude oil that currently represents their largest source of supply, officials said.
With mid-continent crude oil production rapidly increasing, supplies from Canada on the rise and the development of shale plays such as the Bone Springs/Avalon, Bakken and Barnett continuing at a strong pace, the new pipeline is expected to remain a key outlet for crude oil bound for the Gulf market.
As currently designed, the Double E pipeline would utilize approximately 230 miles of existing natural gas pipeline owned by Energy Transfer that would be converted to crude oil service, and require 354 miles of new construction that would follow existing pipeline corridors.
With approximately 40% of the pipeline already in the ground, the planned project offers an expedient and cost-effective solution for the industry. Additionally, approximately 500,000 barrels of crude oil storage capacity being constructed at Enterprise’s ECHO terminal in southeast Harris County would be jointly owned by the joint venture partners.
During the binding open commitment period, which began on May 25 and continues until July 8, interested shippers will have an opportunity to execute a firm transportation services agreement to reserve capacity on the new pipeline.
Subject to customer commitments and required approvals, the Double E pipeline is expected to begin service in the fourth quarter of 2012.
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