Natural Gas Pipeline to Carry Crude Oil from Permian to Gulf Next Year

Adrian C. Hedden | Carlsbad Current Argus | October 10, 2018

A pipeline intended to connect oil and gas producers in the Permian Basin with exportation and refineries in the Gulf Coast was approved to go into service by late 2019.

EPIC Midstream Holdings announced it would use a portion of its natural gas liquids (NGL) line to run crude between Crane, Texas and Corpus Christi once construction of the line is completed in the third quarter of next year.

High consumer demand for crude oil transportation caused EPIC to make the call to use the NGL line while its fractionator remains under construction, read a Friday news release.

When the fractionator is finished in January 2020, the line will convert back to NGL.

The line will have an additional injection point in Wink, Texas, the release read, with multiple terminals and refinery connections in Corpus Christi.

For the early crude service, the 24-inch line will have 400,000 barrels per day of crude oil capacity.

“The construction of the final phase of the EPIC NGL Pipeline is progressing on time with three contractors working on the project over five spreads of the pipeline path,” read the release.

The interim crude service is subject to approval from Federal Energy Regulatory Commission (FERC), and the services is intended to be offered through a tariff EPIC intends to file with the FERC, and pursuant to contracts to be executed with various shippers.

Shippers already signed on to the project include Noble Energy Inc., Apache Corporation and Diamond Back Energy, read the release.

Aside from offering the early service, EPIC also announced the closure of its second open season on the crude oil pipeline.

The success of the second offering allowed the company to upsize the pipeline from 24 inches to 30, expanding capacity in the Permian to about 600,000 barrels per day.

Additional pumps and storage, the release read, could increase the capacity to 900,000 barrels per day.

The crude pipeline will run alongside EPIC’s NGL line, with the two lines traversing about 700 miles from southeast New Mexico to the Gulf Coast.

The pipe was ordered from two separate steel mills, read the release, and the materials are expected to arrive onsite in early 2019.

The needed pumps and equipment are already on-hand, the release read.

“Given our recent commercial success and subsequent up-sizing of the pipeline, we remain responsive to growing demand for crude oil transportation from the Permian Basin,” said Phillip Mezey, EPIC chief executive officer.

“We are proud to be able to offer an interim solution for our customers, while we continue to build out the EPIC Crude Oil Pipeline to service this region.”

Construction of the NGL line began in December 2017, after an agreement was signed with BP Energy Company to anchor the line, linking producers’ NGL reserves in the Permian and Eagle Ford basins to refineries, petrochemical companies and export markets on the east Texas coast.

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