Enterprise Products Partners L.P. and Enbridge Inc. announced plans to construct and operate a pipeline to transport crude oil from the oversupplied hub at Cushing, OK to the Texas Gulf Coast refining complex.
Initially, the Wrangler Pipeline will have the capacity to transport up to 800,000 bpd of crude oil and accommodate the constrained medium-to-light crude oil currently stranded at Cushing and priced at a substantial discount to the oil imports that account for most of the supply being used by Gulf Coast refiners.
The pipeline will be capable of handling additional supplies of crude oil arriving at Cushing from other North American producers. In anticipation of increases in crude oil volumes delivered to Cushing, the joint venture partners will design the pipeline to be easily expanded.
The proposed 36-inch pipeline will originate at the existing Enbridge Cushing Terminal and extend 500 miles southward, closely following existing pipeline corridors, to Enterprise’s ECHO crude oil storage terminal in southeast Harris County, TX, providing access to refineries in Texas City, Pasadena/Deer Park, Baytown, and along the Houston Ship Channel. New storage tankage necessary for pipeline operations will be located at the ECHO site and included in the joint venture. The project will include an 85-mile pipeline to the Beaumont/Port Arthur refining center.
Michael A. Creel, president and CEO of Enterprise’s general partner, said, “This pipeline will be able to transport all grades of crude oil in batched configuration to meet the diverse needs of shippers, allowing producers to maximize the value of their crude oil and provide a more reliable source of domestic supply for Gulf Coast refiners.”
Enterprise and Enbridge announced plans for a binding open commitment period for available capacity on the new pipeline, which will ran from Oct. 3 to Nov. 2. Subject to the required regulatory approvals and sufficient long-term commitments from interested shippers, the pipeline is expected to be in service by mid-2013. Construction of the project is expected to be managed by Enbridge with Enterprise serving as operator.