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NorthAmOil PIPELINES & TRANSPORT NorthAmOil
EPIC launches third open season for crude pipeline
TEXAS
EPIC Midstream announced last week that it was launching a third open season for the EPIC crude pipeline from the Permian Basin to the Texas Gulf Coast. The open season started on October 28 and is due to wrap up on December 17. The first two open seasons for the pipeline were conducted earlier this year.
EPIC is one of the major new pipeline projects offering relief to producers in the Permian Basin after growth in the region was slowed by a take- away capacity crunch that started last year. The crude pipeline runs parallel to the EPIC Y-Grade pipeline, which was designed to carry natural gas liquids (NGLs). However, the Y-Grade pipeline has been temporarily converted to crude service in a bid to expedite more oil shipments out of the Permian Basin.
Interim crude service began on the EPIC Y-Grade pipeline, which can ship up to 400,000 barrels per day (bpd) of oil, in August. Once con- struction on the crude pipeline is completed, the
Y-Grade pipeline will be converted back to NGL service.
The EPIC crude pipeline will have an initial capacity of 600,000 bpd, with an option to be expanded to carry 900,000 bpd.
Interim service on the EPIC Y-Grade pipe- line and Plains All American Pipeline’s Cactus II pipeline has already added more than 1mn bpd of crude takeaway capacity from the Permian since August.
EPIC is also building a crude export dock at the Port of Corpus Christi, where both the crude and NGL pipelines terminate. Construction on the dock is due to be completed in the fourth quarter of 2019, EPIC said in its statement. The dock will be capable of loading Aframax tankers, which can carry up to 750,000 barrels of crude. Construction on a second crude export dock is anticipated to be complete by the third quarter of 2020. This dock will be larger, with the capacity to load Suezmax tankers, which can carry up to 1mn barrels.™
Magellan to redesign Voyager pipeline
US
MAGELLAN Midstream Partners has unveiled plans to redesign its proposed Voyager pipeline in a bid to lower costs. The move follows an open season held to solicit shipper interest in August.
The Voyager pipeline would run from the storage hub in Cushing, Oklahoma and from Midland, Texas in the Permian Basin, to Magel- lan’s facilities in the Houston area. The company has not yet made a final investment decision (FID) on the project.
“After the close of our open season in August, it became apparent to us that we would only be successful with this project if we could develop a more capital-efficient solution than what was originally proposed,” Magellan’s CEO, Michael Mears, told investors on the company’s third-quarter earnings call.
“We have been actively working on this over the past few months with multiple par- ties and we have made significant progress,” he continued. “The project as currently designed will require a fraction of the capital that was originally contemplated and includes multi- ple value-adding components that have been
negotiated with certain counterparties.”
Mears noted that while Magellan could still not guarantee that the project would reach the FID stage, the company was “significantly more
optimistic” about the plan.
Pressed for further details, Mears said the
nature of the project would still be the same, in that it would provide service from Cushing to Houston and it would involve working with partners. However, he declined to elaborate further.
Magellan had previously said in March that it expected the pipeline to come into service in late 2020 with an initial capacity of roughly 300,000 barrels per day (bpd).
The company also reported its third-quar- ter earnings last week, achieving net income of $273mn compared with $594.5mn in the same quarter a year ago. It noted, however, that the figure for the third quarter of 2018 included the $353.8mn gain related to the sale of a portion of Magellan’s ownership interest in BridgeTex Pipe- line. Excluding that gain, the figure for the third quarter of 2018 came in at $240.7mn.™
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w w w . N E W S B A S E . c o m Week 44 05•November•2019