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.

Enbridge launches Open Season for Sanish Pipeline, Bakken expansion

HOUSTON, Texas, and CALGARY, Alta. - Enbridge Energy Partners L.P. (NYSE: EEP) and Enbridge Income Fund Holdings Inc. (CA: ENF), affiliates of Enbridge Inc. (NYSE: ENB) on Feb. 28 announced a second Open Season for its Bakken Expansion Program in conjunction with an Open Season for EEP's proposed Sanish Pipeline.

The Sanish Pipeline will transport crude oil production from Johnson's Corner to Beaver Lodge, N.D.

The Bakken Expansion Program Open Season will offer pipeline capacity on Enbridge's system from Beaver Lodge into Enbridge's terminal at Cromer, Manitoba, where it connects with the Enbridge Mainline System, which offers access to refineries throughout the Upper Midwest, eastern Canada, Mid-Continent and as far as the U.S. Gulf Coast.

The two open seasons are being conducted jointly to provide shippers with the option of contracting for capacity from Johnson's Corner to Enbridge's Beaver Lodge and Berthold Stations as well as to Cromer.

EEP's proposed Sanish Pipeline is a new 36-mile, 12-inch crude oil line capable of transporting a minimum 67,000 barrels per day (b/d) from Johnson's Corner into EEP's existing facilities at Beaver Lodge. The Bakken Expansion Program, currently under construction by EEP in the U.S. and by Enbridge Income Fund in Canada, will provide a total of 145,000 b/d of incremental pipeline capacity from Beaver Lodge to Cromer when it comes into service in Q1 2013. At Berthold, EEP is constructing a new 80,000 b/d rail export facility which is planned to be in-service at the same time.

"The Bakken and Three Forks formations have catapulted North Dakota into the position of being one of the leading oil producing states in the U.S. Along with this proposed Sanish Pipeline, we have increased the export capacity of our North Dakota system by almost 350 percent since 2008," said Stephen J. Wuori, president, Liquids Pipelines, Enbridge. "Sanish provides customers located south of the river with an entrance to Enbridge's expanded systems to access a total of 475,000 b/d of capacity out of North Dakota in 2013. Enbridge is developing other projects that will continue our significant capital investment in this prolific region to provide reliable, economical and secure access to a wide variety of refinery markets, including the U.S. Gulf Coast."

Through the open seasons, shippers will have the opportunity to secure space on the Sanish Pipeline, including 15,000 b/d of service from Johnson's Corner to Cromer.

The binding Open Seasons began on Feb. 28, and closes on April 11.

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.

Plains All American announces new Mississippian Lime Pipeline

Plains All American Pipeline, L.P. (NYSE: PAA) on Feb. 7 announced plans to construct a new 170-mile pipeline to service the increasing Mississippian Lime crude oil production in northern Oklahoma and southern Kansas.

The pipeline, in conjunction with the previously announced Medford-to-Cushing pipeline conversion, is designed to provide approximately 175,000 b/d of crude oil transportation capacity to the Cushing market and is expected to be completed in mid-2013.

TransCanada attacks Cornell report on Keystone XL jobs

TransCanada has criticized a study from the Cornell University Global Labor Institute stating that the company's Keystone XL project would only generate up to 4,650 temporary direct construction jobs for two years. 

"Why groups like (the Natural Resources Defense Council) and Cornell continue to question job creation in the United States is a concern," said Terry Cunha, a spokesman for TransCanada. "We fully understand the jobs that are needed to build a piece of infrastructure of this size. We like to think of ourselves as the experts," Cunha added.

Hoover Energy Partners buys Permian Basin assets, building crude oil pipeline

HOUSTON, Texas - Hoover Energy Partners LP announced on Jan. 12 that it has acquired a 50-mile natural gas gathering system, water transportation system and water disposal well located in Reeves County, Texas, from Eagle Oil & Gas.

The Eagle system is underpinned by a long-term dedication of approximately 68,000 gross acres that Comstock Resources, Inc. (NYSE: CRK) recently acquired from Eagle Oil & Gas.

Additionally, Hoover announced it has begun construction on Phase I of the Pecos Crossing Pipeline, a 24-mile, 12-inch crude oil system that will serve Ward and Reeves counties, Texas, and will have a capacity of up to 120,000 b/d. Both assets are located in the heart of the Bone Spring and Wolfcamp plays of the Delaware Basin.

"Hoover Energy Partners has shifted into high gear with the Eagle acquisition and construction of Pecos Crossing," said Randy Hoover, president of Hoover Energy Partners. "We see 2012 as the year that Hoover will emerge as the premier midstream company serving producers targeting the Wolfbone play in Reeves and Pecos counties. Additional growth projects will be announced in the coming months."

Pecos Crossing Pipeline is scheduled to be operational in April 2012 and will be the first crude oil pipeline operating south of the Pecos River. At its northern terminus, Pecos Crossing will deliver to Plains All American Pipeline's newly constructed Barstow Station. At the southern terminus, Hoover will serve the Perry Ranch Station, a newly constructed truck loading and tank terminal.

Multiple producer- and Hoover-owned laterals will continue to be constructed and connected as the Wolfbone is developed. Phase II of Pecos Crossing is being contemplated as the Wolfbone play extends south into Pecos County, Texas, where Hoover's legacy 550-mile natural gas gathering system and treating facilities are located.