Enterprise/ETP JV To Build Crude Line

May 2011, Vol. 238 No. 5

Enterprise Products Partners L.P. and Energy Transfer Partners, L.P. plan to form a 50/50 joint venture to design and construct a crude oil pipeline from Cushing, OK to Houston.

The project would allow greater access to the Gulf Coast-area refining complex and add 500,000 barrels of storage capacity at facilities to be constructed and owned by the joint venture at Enterprise’s new Houston crude oil terminal.

The pipeline would provide an outlet for more than 400,000 bpd of crude oil supplies now stranded at the Cushing hub and priced at a substantial discount to imported crude oil on the Gulf Coast. The pipeline would also give refiners on the Gulf Coast improved access to growing supplies of domestic crude oil production and an alternative to higher priced crude oil imports, which represent their largest source of supply.

Subject to sufficient commitments from shippers and the required regulatory approvals, the new pipeline is expected to begin service in late 2012. The joint venture partners would share commercial responsibilities, Using new and existing pipelines, the 584-mile project would originate at Enterprise’s 3.1 million barrel crude oil storage facility in Cushing.

Enterprise and Energy Transfer would each contribute existing assets to the joint venture, including Energy Transfer’s 240-mile, 24-inch natural gas pipeline in East Texas which would comprise 40% of the proposed system. By using infrastructure already in place and following existing pipeline rights-of-way for the 354 miles of new construction, the joint venture partners expect the pipeline to be in service much sooner than laying new pipe only.

The terminus of the pipeline would be at Enterprise’s ECHO crude oil storage and terminal facility in southeast Harris County. The ECHO crude oil terminal would offer access to major Texas Gulf Coast refining centers in Texas City, Pasadena/Deer Park, Baytown and on the Houston Ship Channel.

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