It’s been a busy month for companies planning construction on pipelines destined for the crude trading hub in Cushing, Okla.
First, Enterprise Products Partners LP announced it would hold a binding open season on its proposed crude pipeline from North Dakota to Cushing. Current plans have the Bakken-to-Cushing Pipeline originating in the Williston Basin and also serving the Powder River and Denver-Julesburg (D-J) basins. The pipeline has an initial design of about 340,000 barrels per day (bbl/d) and may expand to more than 700,000 bbl/d. It will also be able to transport up to six grades of crude oil and products, including Rockies condensate and processed condensate.
Then NGL Energy Partners LP and Rimrock Midstream announced a joint venture crude oil pipeline—the Grand Mesa Pipeline—to transport crude from the D-J and Wattenberg fields. The pipeline will originate in Weld County, Colo., and terminate at NGL’s Cushing terminal and has an initial planned capacity exceeding 130,000 bbl/d.
Why the sudden rush to Cushing? Given comments by leadership at Enterprise, the push toward U.S. energy independence is likely a driving factor. New pipeline capacity south to the Gulf Coast certainly is also a factor.
“This [Bakken-to-Cushing Pipeline] offers a reliable, safe and economical solution that promotes continued development of some of our nation’s most prolific producing areas and reduces the need for imports of crude oil,” said A.J. “Jim” Teague, executive vice president and COO of Enterprise’s general partner.
The timing likely couldn’t be better—U.S. Energy Information Administration (EIA) data shows that weekly commercial crude oil imports into the region recently hit their highest level since the EIA began tracking weekly data in 1990, reaching about 2.21 million bbl/d.
Of course, with rapid production growth in the Bakken Shale and D-J Basin and a current lack of transport options, the companies also expect their new pipelines to be a boon to customers, both upstream and downstream.
“The Bakken-to-Cushing pipeline would provide flow assurance and market choice,” Enterprise’s Teague said, while NGL Energy Partners’ announcement indicated that the D-J and Wattenberg fields are in need of the development.
Caryn Livingston can be reached at clivingston@hartenergy.com or 713-260-6433.
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