Enbridge outlines new crude oil pipeline project to serve Cushing Hub

PONTIAC, Ill. - Enbridge representatives on April 23 discussed a proposed new pipeline project that would begin north of Pontiac, Ill., and terminate at the Cushing, Okla., hub beginning in 2014.

While the project is in its preliminary stages, Enbridge is holding open houses in the four states affected - Illinois, Missouri, Kansas and Oklahoma - to try and educate the public on the proposed 600-mile pipeline.

An Enbridge  open house was held at the Pontiac Rec Center and about 50 people had stopped in by 7 p.m., said Lorraine Little, senior manager of Enbridge public affairs.

"There has been good interest shown for the project," she said.

The proposed crude oil pipeline would run parallel to the current Spearhead pipeline for the most part, said Jerrid Anderson, project manager. About 170 miles would be in Illinois, he said.

"There would be about a 50-foot offset between the pipelines. The new line will not replace the Spearhead. They would both be operational,” he explained.

The Spearhead line has a capacity for 190,000 barrels per day (b/d), while the new pipeline would be able to carry 600,000 b/d. The new pipeline, originally conceived to use 30-inch diameter pipe, was changed to a larger 36-inch diameter pipe. The pipe would be buried four feet underground.

Magellan Midstream to expand Crane-to-Houston crude oil pipeline capacity

TULSA, Okla. - Magellan Midstream Partners, L.P. (NYSE: MMP) announced on March 15 that it plans to expand the capacity of its Crane-to-Houston crude oil pipeline to 225,000 barrels per day (b/d).

Based on Magellan's recent successful binding open season, the expanded pipeline capacity is fully committed with long-term agreements.

"The market clearly confirmed the attractive fundamentals of our Crane-to-Houston crude oil pipeline, and we are pleased to increase the scope of our project in response to this strong industry demand," said Michael Mears, chief executive officer. "We continue to believe our Crane-to-Houston pipeline will be the most direct and cost-efficient route to deliver growing West Texas crude oil production to the refineries in the Houston and Texas City area, providing an alternative transportation option that will help alleviate the current crude oil oversupply situation in Cushing, Oklahoma."

Magellan had previously announced the initiation of a project to reverse and convert to crude oil service its pipeline from Crane, Texas, to its East Houston, Texas, terminal, with an expected initial capacity of 135,000 b/d and a cost of $245 million. The project is now estimated to cost $375 million including the cost to expand the system to its maximum capacity of 225,000 bpd.

Subject to receiving the necessary permits and regulatory approvals, the partnership expects the reversed pipeline to begin transporting crude oil at partial capacity by early 2013, ramping to its full 225,000-b/d capacity by mid-2013.

SemGroup, Gavilon, Chesapeake to build Cushing oil pipeline

TULSA, Okla. - SemGroup Corp., Gavilon Midstream Energy LLC and an affiliate of Chesapeake Energy Corp. will form a joint venture to build a pipeline to deliver crude oil to a storage facility in Cushing, Okla., from production in western and north central areas of the state.

The pipeline will consist of two laterals, one originating near the town of Alva in Woods County, Okla., and the other near the town of Arnett in Ellis County, Okla. The laterals will intersect near Cleo Springs in Major County, Okla., where the pipeline will increase in diameter and continue east to storage at Cushing.

The pipeline and storage facility will meet growing midstream requirements resulting from the burgeoning drilling activity in western Oklahoma and the Mississippi Lime play.

Construction should begin in July and service is expected to start in the third quarter of 2013, according to a Feb. 21 statement. The 210-mile pipeline will have an initial capacity of 140,000 barrels a day (b/d) and can be expanded to 180,000 barrels.

Lateral lines from Alva and Arnett, Okla., will intersect and bring crude oil to a one-million-barrel-capacity tank farm in Cushing.

Cushing is the largest U.S. oil-storage hub and delivery point for crude futures traded on the New York Mercantile Exchange. The hub’s total capacity was 66.5 million barrels at the end of September, according to the U.S. Energy Department.

Enbridge line will send Canadian tarsands bitumen from Illinois to Cushing

PEKIN, Ill. - A portion of a proposed $1.9 billion pipeline to carry crude oil from Illinois to Oklahoma before heading south to refineries on the Gulf Coast would cut through parts of Livingston, Woodford, Tazewell, Mason and Fulton counties in Illinois.

Being called the Flanagan South Pipeline, the large-scale project by Alberta-based Enbridge Inc. would parallel much of the oil shipper's already existing 650-mile Spearhead Pipeline from Flanagan to Cushing, Okla., site of one of the nation's largest storage facilities for crude oil.

"We've sent a mailing to county commissioners as well as to landowners who might be impacted by the route," Kevin O'Connor, a spokesman for the project, said on Jan. 26.

"We're going to be out in the next several weeks doing some civil surveys, and eventually some environmental surveys to start to give us a better handle of specifics out on the ground."

O'Connor said the diameter of the pipeline currently being considered is 30 inches. The capacity also is still to be determined. The Spearhead line it would parallel, built in the early 1960s, is a 22-inch to 24-inch pipeline that carries 193,300 barrels per day (b/d), according to the company's website.

Provided the pipeline receives the necessary federal and state approval to proceed, construction could begin as soon as mid-year 2013 and be completed by the following year, O'Connor said. It is unclear how many construction jobs the project would entail.

Plains All American converting Oklahoma LPG pipeline to crude service

HOUSTON, Texas - Plains All American Pipeline, L.P. (NYSE: PAA) on Dec. 8 announced it is converting an existing Oklahoma liquefied petroleum gas (LPG) pipeline into crude oil service.

The pipeline, which extends from Medford, Okla., to PAA's crude oil terminal facility in Cushing, Okla., will provide an initial crude oil throughput capacity of 12,000 barrels per day (b/d) by January 2012 and will be expanded to 25,000 /d by July 2012.

"Converting and expanding this pipeline provides timely take-away capacity for growing crude oil production in the Mississippian Lime formation in northern Oklahoma and southern Kansas," said Harry N. Pefanis, president and COO of Plains All American. "This project extends our commitment to service Mississippian producers and is one of a number of projects PAA is progressing to service the growing infrastructure needs in this area and multiple resource plays throughout North America."

Great Salt Plains Pipeline construction begins in Oklahoma

TULSA, Okla. - Parnon Gathering has begun construction of its crude oil pipeline in central Oklahoma.

The pipeline, to be named the Great Salt Plains Pipeline, will transport production from central and western Oklahoma and interconnect with Parnon's crude oil tanks located at Cushing, Okla.

The project includes laying approximately 175 km. of new eight-inch diameter pipeline from Cherokee, Okla., to Cushing, Okla., and is designed to move 18,000 b/d of crude oil with an option to up the rate to 35,000 b/d.