Adds information on Buckeye Partners.
Commodity trading firm Trafigura has started shipping crude on the 670,000 b/d Cactus 2 pipeline, moving Permian crude to the Gulf coast.
Plains All American Pipeline, the owner and operator of the line, said last week that Cactus 2 would start service around 15 August from Wink, Texas, to Ingleside near Corpus Christi.
Trafigura, an anchor shipper on the line, said today that it received crude from Cactus 2 at the Buckeye Partners terminal in Corpus Christi. Buckeye and Trafigura have worked together to commission crude from the initial Cactus 2 service through connected infrastructure in the Eagle Ford basin. Cactus 2 will be in full service in the first quarter of next year.
Trafigura also signed a contract with NuStar Energy to connect more Eagle Ford output to the Cactus 2 crude pipeline and to boost storage in Corpus Christi.
NuStar is planning to export crude from Cactus 2 as soon as this week after completing the first phase of a project to connect the pipeline to its Corpus Christi export terminal.
In a second stage of the project, NuStar is building an 8-mile (13km), 30-inch pipeline to move crude from a Cactus 2 connection in Taft, Texas, to Corpus Christi. That line will be in service this quarter.
Plains is adding a 5¢/bl surcharge on Cactus 2 after the US administration rejected the company's request for a waiver on imported steel tariffs.
The surcharge will go into effect on 1 April, 2020, and is being implemented "for the purpose of amortizing capital expenditures associated with increased construction costs as a result of governmental regulation and tariffs," the company said in a filing to federal regulators.
Two other large pipelines are expected to come into service this year to move more Permian crude to the US Gulf coast — the 400,000 b/d Epic line and Phillips 66' 900,000 b/d Gray Oak line.
The new pipeline capacity has led to stronger prices of West Texas crude. The WTI Midland discount to WTI Houston narrowed by $1.65/bl to $3.52/bl last week, according to Argus data.
