The expanded pipeline is expected to be operational in the first half of 2021
Image: Enterprise will expand Midland to ECHO oil pipeline system in Texas. Photo: courtesy of Free-Photos from Pixabay.
Enterprise Products Partners has announced it has secured long-term agreements that support a further expansion of the Midland to ECHO crude oil pipeline system in Texas.
The North American midstream company will construct a pipeline that connects the Midland, Texas storage facility to its ECHO Terminal through its Eagle Ford system.
The new pipeline will have an initial capacity of 450,000 barrels per day (BPD), expandable to as much as 540,000 BPD.
The pipeline is expected to be operational in the first half of 2021.
Enterprise expects to achieve up to $60m per year of savings as a result of the pipeline project, primarily from a reduction in the use of costly drag-reducing agents and managing pump operations.
The project will also enable the partnership to maximise the operational flexibility of the Seminole Red pipeline in either crude oil or natural gas liquid (NGL) service.
Earlier in the year, the company converted the Seminole pipeline from mixed NGL service to crude oil service for Midland to the Houston market.
By 2025, the partnership expects NGL production from the Permian Basin to increase by more than 50%.
Enterprise expects Seminole to return to NGL Service during second half of 2021
Presently, Enterprise expects to convert the Seminole Red pipeline back into NGL service during the second half of 2021.
Enterprise’s general partner CEO Jim Teague said: “Crude oil and NGL production from the Permian Basin and the Eagle Ford is expected to increase by five million BPD by 2025.
“This project gives us the flexibility to respond to changing customer demand for crude oil and NGL pipeline capacity over the long-term.
“The economic returns for this expansion are also supported by our opportunity to reduce costs.
“In the aggregate, our total crude oil pipeline capacity from the Permian to ECHO will be able to swing from a low of 1.4 million BPD to 1.8 million BPD, depending on market demand.”
The Houston crude oil distribution system of Enterprise consists of over 45 million barrels of storage, nearly 4 million BPD of export capacity from the partnership’s network of marine terminals, and connects to every refinery in the Houston, Texas City and Beaumont/Port Arthur area.