I was interested to read recently about a new crude oil pipeline to be built by Enterprise Products Partners LP and Enbridge Inc. All new projects like this have the potential to create jobs, maximize local productivity, and ensure that our state’s natural resources are utilized in safe, secure, and productive ways. This latest proposal is unique in that most of the largest new pipelines are designed to carry gas. This line would instead bring oil to the Gulf Coast from the Cushing, Oklahoma storage hub. According to the latest report on the project in the Oil & Gas Journal , under the current plan, a 800,000 barrel-a-day crude oil pipeline would be designed, built and operated to bring oil from Cushing to Enterprise’ Texas Gulf Coast refining complex. This would be the largest pipeline connecting the Oklahoma oil storage hub with Gulf Coast refiners.
If the proposal continues as planned, the 36-in. OD Wrangler Pipeline will begin at the Enbridge Cushing terminal and then extend 500 miles south along pipeline corridors ending in southeast Harris County at Enterprise’s ECHO oil storage terminal. All told, the new crude oil pipeline would provide access to refineries in Texas City, Baytown, and along the Houston Ship Channel. The pipeline is set to accommodate a variety of grades and oil sources. In addition to the main pipeline, the joint project plans also include the creation of an 85 mile line to the Beaumont/Port Arthur refining center. On top of that, additional storage necessary for the operations of the new pipeline will be built and housed at Enterprise’s ECHO site in Harris County, Texas.
The two companies announced a binding open commitment for available capacity on the new pipeline which ran from October 3rd and ended last Wednesday. Depending on the timing of required regulatory approvals and commitments from interested shippers, the companies hope to design, build, and begin operating the new line in less than two years. Under the current proposal, the line would enter service in mid-2013.
Observers note that this line would be the latest entrant into the race to be the first to supply Texas and surrounding areas with crude oil from Cushing. The line will likely compete with a planned pipeline from TransCanada Corp. which would provide 500,000 b/d, as well as the Magellan Midstream Partners’ Longhorn pipeline, which would bypass Cushing and deliver oil from fields in west Texas.
This latest agreement is essentially a combination of separate projects that Enterprise and Enbridge had made previously, but that had stalled. Earlier this year Enterprise had reached an agreement with Energy Transfer Partners LP to build a 400,000 b/d oil pipeline from Cushing to Houston. That announcement was made in April, 2011, but was eventually cancelled in the summer because of insufficient shipper interest. A few months before that, Enbridge has announced its own Monarch project designed to move light oil from Cushing to Houston at 370,000 b/d, expandable up to 480,000 b/d. However, the Wrangler pipeline could replace the Monarch pipeline as a route for delivering the crude oil to Houston.