Plains, Enterprise Products Form JV In South Texas

September 2012, Vol. 239 No. 9

Plains All American Pipeline and Enterprise Products Partners have formed a 50/50 crude oil pipeline joint venture in South Texas.

The arrangement provides for PAA and EPD to consolidate certain portions of previously announced pipeline projects servicing the Eagle Ford shale play in South Texas. The joint venture system is supported by long-term commitments totaling 210,000 bpd. The consolidation will provide shippers with increased market flexibility and enable PAA and EPD to optimize their capital investments.

The joint venture will include a 140–mile crude oil and condensate line extending from Gardendale in LaSalle County to Three Rivers in Live Oak County and continuing on to Corpus Christi and a 35-mile pipeline segment from Three Rivers to Enterprise’s Lyssy station in Wilson County. The system, which is under construction, will have a targeted capacity of 350,000 bpd and will include a marine terminal facility at Corpus Christi and 1.8 MMbbls of operational storage capacity across the system.

At Lyssy, the joint venture pipeline will interconnect with EPD’s South Texas Crude Oil Pipeline that transports crude oil to Sealy for ultimate delivery into the Houston-area refinery market. Portions of the system are expected to be placed in service in the fourth quarter with the balance of the system expected to be placed into service in 2013. The joint venture system will be an intrastate common carrier pipeline with a posted initial base tariff rate of $1.25 per barrel from Gardendale to all destinations.
PAA will serve as operator of the joint venture system which will not include PAA’s Gardendale Gathering System or EPD’s South Texas Crude Oil Pipeline.