Enterprise Products Partners has launched a binding open commitment period to weigh shipper demand for capacity on a new crude and condensate pipeline from the Bakken through the Powder River and Denver-Julesburg (DJ) basins to the Cushing, Oklahoma, hub.
The pipe could move up to six grades of crude and products, including Rockies condensate and processed condensate, the company said.
The decision to include condensate in the proposed pipeline could prove to be a unique twist. The line was originally discussed as a crude system, but interest in condensate has soared after Enterprise earlier this year confirmed it had won US approval to export minimally processed condensate. The event has sparked intense interest in the condensate export business, crude export regulations and the viability of condensate splitter projects.
The company operates and holds a 50pc interest in the Seaway pipeline system, which consists of a 400,000 b/d crude pipeline from Cushing to Texas and a 450,000 b/d twin line that will be connected to flow heavy crudes from the upstream 600,000 b/d Flanagan South line. Enterprise was not available for comment on whether Seaway could move condensate to the Gulf coast for export.
The development came a day after Phillips 66 said it had permits and engineering plans in hand for a crude-by-rail terminal in the Bakken in an unusual move by a refiner to build, own and operate its own origination crude-loading facility. Phillips 66 plans to make a final investment decision on the site by year-end.
Shippers have previously shown mixed support for pipelines out of the Bakken, sinking one proposal from the Bakken to Cushing in 2012. But lately the tide appears to be shifting with Energy Transfer Partners and Enbridge proceeding with new pipeline plans. More pipeline capacity also now exists for crude to move from the midcontinent to the Gulf coast, and the profitability of rail shipments has also eroded since 2012, two factors that may be boosting support for Bakken lines.
Enterprise did not give a capacity figure for the line but has previously said it was considering a 340,000 b/d line. If shippers support it, service would begin in stages. The DJ basin to Cushing segment could be in service in the fourth quarter of 2016, and the line would be fully operational by the third quarter of 2017.
"By leveraging the capabilities of our existing midstream network, the Bakken-to-Cushing pipeline would provide flow assurance and market choice. At Cushing, shippers would have access to one of the most liquid crude oil trading hubs in the world, as well as a comprehensive network of storage and pipelines serving the US Gulf Coast refining complex and waterborne transportation options," said Enterprise chief operating officer Jim Teague.
Enterprise exported a 400,000 bl shipment of condensate in July, most of which was supplied by Pioneer Natural Resources, which also received a confirmation from the US Commerce Department that cleared it to export distilled condensate. Enterprise said it expects equivalent monthly shipments through year-end.
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