Enterprise Products Partners has announced it has long-term agreements that support additional expansion of the Midland to Echo crude oil pipeline system.
The midstreaming giant will build a pipeline that connects the partnership’s 6-million-barrel (Mmbbl) Midland, Texas, storage facility to its Echo Terminal through its Eagle Ford system in South Texas.
This line will have an initial capacity of 450,000 barrels per day and can be expanded up to 540,000 Bpd. Enterprise’s Houston crude oil distribution system includes more than 45 Mmbbl of storage, roughly 4 million Bpd (Mmbpd) of export capacity from the partnership’s network of marine terminals, and connects to every refinery in the Houston, Texas City and Beaumont/Port Arthur, Texas, area, representing approximately 4.5 Mmbpd of capacity.
In addition to supporting crude oil production growth from the Permian Basin, this pipeline will allow Enterprise to optimize its entire Midland to Echo system, which will be comprised of four pipelines. The company expects to achieve up to $60 million of annualized cost savings, primarily from a significant reduction in the use of costly drag reducing agents and managing pump operations.
This expansion will also enable Enterprise to maximize the operational flexibility of the Seminole Red pipeline in either crude oil or natural gas liquids service based on the needs of the respective markets.
Earlier this year, Enterprise converted the Seminole line from mixed NGL service to crude oil service. The partnership expects NGL production from the Permian Basin to increase by over 50% by 2025.
To facilitate this growth, Enterprise currently expects to convert the Seminole Red pipeline back into NGL service during the second half of 2021. The partnership estimates that it can change the service of the Seminole pipeline from crude oil service to NGL service in less than 60 days. The partnership will retain the flexibility to convert the pipeline back into crude service should market conditions support the need for additional capacity in the future.
“This pipeline project will also allow our customers with crude oil and condensate production in both the Permian Basin and the Eagle Ford to maximize the value of their contracted pipeline capacity,” Enterprise said.
The Pipeline is expected to begin service in the first half of 2021.
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