Oil in the US has followed a similar upward trajectory, thanks to shale developments in the Bakken, Eagle Ford and Texas Permian Basin. North Dakota alone is on target to contribute over 1 million bpd in new production with at least 50% more expected in the next three years. According to the EIA, US crude production is on track to surpass the 9.27 million bpd record set in 1972.
The huge increase in volumes coming from non-traditional sources has pipeliners scrambling to meet transportation demand. Plains All American Pipeline is constructing the Cactus Pipeline, a 512 km, 20 in. OD line that will run from the Permian basin in Texas to refineries in Corpus Christi. The 220 000 bpd line is expected to be onstream by early 2015.
Energy Transfer and Phillips 66 intend to build the Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline (ETCOP). DAPL will have a capacity to move over 450 000 bpd from North Dakota to the Midwest. ETCOP will then move the crude from the Midwest to Texas.
Enterprise Products is holding an open season on a 1900 km line that would move up to 340 000 bpd from North Dakota to Cushing, Oklahoma. The line, which could be expanded up to 700 000 bpd, is tentatively scheduled to enter service by late 2017.
Plains All American announced plans to build a crude line from Cushing, Oklahoma to Memphis, Tennesse. The 440 mile Diamond line will have a capacity of 200 000 bpd and cost US$900 million. The project is expected to enter operations late in 2016.
Enbridge and Enterprise’s Seaway Twin line came into service in late 2014. The 512 mile line delivers 450 000 bpd from Cushing to Freeport Texas, more than doubling the system’s previous capacity, to a current total of 850 000 bpd.
In addition to shale oil production, shippers in the US must also accommodate growing supplies from Canada’s oilsands. Production from the immense bitumen deposit in northern Alberta is expected to grow from approximately 1.9 million bpd in 2014, to up to 4.2 million bpd by 2022.
Currently, Canada exports around 3 million bpd to the US, most of which travels via Enbridge’s various systems. The Calgary-based company is looking at ways to increase deliveries in existing networks. It recently announced that it will spend CAN$7.5 billion to refurbish its Line 3, which goes from Alberta to Superior Wisconsin. The project will remove bottlenecks and allow the line to function at its full capacity of 760 000 bpd. Enbridge’s new Flanagan South line, running from Illinois to Cushing, Oklahoma, will add 600 000 bpd of new capacity when commissioning is completed.
Early in 2014, TransCanada’s Gulf Coast project began deliveries of 300 000 bpd from Cushing, Oklahoma, to Nederland, Texas, with plans to ramp of by 520 000 bpd. The project is the US-portion of the Keystone XL pipeline, a project to ship up to 830 000 bpd directly from Alberta to Texas.
NGLs are emerging as a significant contributor to pipeline growth. Composed of ethane, butane and propane, NGLs are increasingly being targeted in shale gas plays as a valuable additional commodity. They are currently being stripped from shale gas at a rate of approximately 2.5 million bpd, primarily to be used as feedstock for the petrochemical industry. The American Chemical Council recently announced that they had recorded almost 100 chemical and plastics projects totalling US$71.7 billion in potential new investment by the year 2020 in the US.
Pipeline companies are planning a score of major network initiatives to deliver NGLs to market. Enterprise Products Partners is expanding its Aegis pipeline system in Texas and Louisiana to gather and deliver up to 425 000 bpd of pure ethane to customers along its 432 km length. EnLink Midstream (a new company formed by Devon and Crosstex Energy) recently completed Phase 2 of its Cajun-Sibon NGL expansion, boosting capacity from 50 000 bpd to 120 000 bpd.In early 2014, ONEOK Partners brought three gas and NGL projects onstream, including a 540 mile, 16 in. sterling pipeline that can shop almost 200 000 bpd from the Cana-Woodford shale to Mont Belvieu, Texas, storage site (the line can be expanded to 250 000 bpd, if needed).
MarkWest Utica EMG formed a joint venture with Kinder Morgan to open a 1760 km natural gas liquids pipeline to the Gulf Coast, expand northern Ohio rich-gas processing capacity, and add Gulf Coast fractionation capacity. The JV plans to have the 400 000 bpd line in operation by 2015.
ONEOK Partners purchased Chevron’s West Texas LPG Pipeline and Mesquite Pipeline networks, which gather and process NGLs in New Mexico and Texas and deliver them to Mont Belvieu, Texas. The US$800 million acquisition includes 2600 miles of pipeline, increasing ONEOK’s NGL network to 6900 miles of pipe capable of gathering 800 000 bpd system-wide.
Sunoco is expanding its Mariner East NGL pipeline service. Currently, the system delivers 70 000 bpd from Pennsylvania, West Virginia and Ohio to Sunoco’s Marcus Hook Industrial Complex in Pennsylvania. The Mariner East 2 project will add 275 000 bpd, bringing the total to 345 000 bpd.
Written by Gordon Cope and edited from published article by Elizabeth Corner
To read the full version of this article, please download a copy of the February 2015 issue of World Pipelines.