... 2017 U.S. Crude Oil Pipeline Report: KXL, DAPL Drive Development

2017 U.S. Crude Oil Pipeline Report: Revived Pipelines Drive Development

A year ago, Energy Transfer was dealing with massive protests and revoked easements amid the completion of the Dakota Access Pipeline. Now, the company is in the process of commissioning the pipeline for full operations.

A year ago, TransCanada was looking to appeal the Obama administration’s rejection of the Keystone XL pipeline. Now, the company has a freshly issued Presidential Permit from the U.S. State Department.
What a difference a year makes, huh?

Among the first executive actions President Donald Trump were orders to expedite the approval of the Dakota Access Pipeline (DAPL) and Keystone XL (KXL) projects. Those massive pipeline projects lead the way for the 2017 construction season. Additionally, a number of other projects are already in progress to expand capacity for the U.S. oil transportation infrastructure. What follows is an overview of many of the oil related projects currently under way or in the permitting process.

Cactus Pipeline Expansion

Location: Texas
Stakeholder(s): Plains All American Pipeline LP

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Overview: The Cactus pipeline is a 310-mile, 20-in. crude oil pipeline and is capable of transporting crude oil from the Permian Basin to the Plains/Enterprise Products Partners Eagle Ford Joint Venture (Eagle Ford JV) Pipeline. The Eagle Ford JV Pipeline has a capacity of 660,000 barrels per day (bpd) and serves the Three Rivers and Corpus Christi markets directly and can supply the Houston-area market through a connection to the Enterprise South Texas Crude Oil Pipeline. Crude oil delivered on Cactus has access to the Eagle Ford JV barge dock facility in the Corpus Christi area as well as dock capacity at third party facilities in Corpus Christi and Ingleside via connections with the Eagle Ford JV pipeline.

Progress: Plains announced Jan. 18 that it is expanding the capacity on the Cactus pipeline from McCamey to Gardendale, Texas, to approximately 390,000 bpd. The expansion will allow Plains to move increasing production volumes from the Permian Basin to Corpus Christi and other delivery points along the system. The expansion includes manifold and metering enhancements at Plains’ origination station, which are anticipated to be completed in the third quarter this year.

Dakota Access Pipeline PathDakota Access Pipeline

Location: North Dakota, South Dakota, Iowa and Illinois
Stakeholder(s): Energy Transfer Partners, Sunoco Logistics

Overview: The Dakota Access Pipeline is a 1,172-mile, 30-in. pipeline extending from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois. The pipeline will transport domestically produced, light, sweet crude oil from North Dakota to major refining markets in the Midwest. After months of delay, the project received federal approval to move forward in January.

Progress: Construction of the pipeline is mechanically complete. Energy Transfer is conducting tests and line-fill operations. The pipeline is scheduled to begin service June 1.

Keystone XL Pipeline

Location: Alberta to U.S. Midwest and Southeast
Stakeholder(s): TransCanada

Overview: The Keystone XL Pipeline Project is a proposed 1,179-mile, 36-in. diameter crude oil pipeline from Hardisty, Alberta, to Steele City, Nebraska. At an estimated cost of $5.3 billion (USD), the pipeline will transport crude oil from Canada, as well as the Bakken shale region of Montana and North Dakota. The pipeline will have capacity to transport 830,000 bpd to Gulf Coast and Midwest refineries.
Progress: After being denied approval in 2015, TransCanada received a Presidential Permit in March after an executive order by President Donald Trump invited the company to resubmit its application and mandated an expedited review of the project. Construction is expected to begin this summer.

Line 3 Replacement Project

Location: North Dakota, Minnesota, Wisconsin
Stakeholder(s): Enbridge

Overview: Line 3 is an existing 1,097-mile crude oil pipeline, originally installed in the 1960s, from Edmonton, Alberta, to Superior, Wisconsin, and is an integral part of Enbridge’s Mainline System. The Line 3 Replacement Program is an integrity and maintenance driven project, and spans from Hardisty, Alberta, to Superior and consists of 1,031 miles of 36-in. diameter pipeline. The U.S. portion of the Line 3 Replacement Program consists of replacing the pipeline from Neche, North Dakota, through Minnesota, to Superior. The line is physically equipped to transport all grades of crude oil, based on shipper demand. Upon replacement, the average annual capacity of Line 3 will be 760,000 bpd. The project is estimated to cost $7.5 billion.

Progress: The project is under regulatory review by the Minnesota Department of Commerce, which released its Draft Environmental Impact Statement on May 15 for public comment. Pending regulatory approval, the replacement pipeline is expected to be in service sometime in 2019. The existing Line 3 will then be decommissioned.

Permian Basin to Cushing Pipeline

Location: Texas, Oklahoma
Stakeholder(s): Plains All American Pipeline LP

Overview: The proposed Permian Basin to Cushing Pipeline could add up to 350,000 bpd of takeaway capacity in the region. Originating in Midland and Colorado City, Texas, the pipeline would deliver crude to Plains’ terminal in Cushing, Oklahoma.

Progress: Plains All American announced an open season to attract shipper commitments on April 18, running until May 30. Pending a successful open season and permitting approvals, the pipeline could be operational by mid-2019.

Saddlehorn Pipeline

Location: Colorado, Oklahoma
Stakeholder(s): Magellan Midstream Partners, Plains All American Pipeline LP and Anadarko Petroleum Corp.

Overview: The Saddlehorn Pipeline is an approximately 550-mile pipeline that will be capable of transporting at least 190,000 bpd of crude oil from the DJ Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, Oklahoma, owned by Magellan and Plains. The pipeline’s Platteville, Colorado, origin and Cushing destination will each include 1 million barrels of storage. The pipeline is also being extended from Platteville to Carr, Colorado.

Progress: The project is currently under construction. The project owners announced a supplemental open season in December. Saddlehorn has already received binding commitments from a wholly owned subsidiary of Anadarko and from Noble Energy Inc. The Platteville-to-Cushing segment of the pipeline is expected to be operational during mid-2016, and the Carr-to-Platteville segment is expected to be operational in the fourth quarter of 2016. The project is currently estimated to cost between $800 million and $850 million.

Upland Pipeline Project

Location: North Dakota, Saskatchewan
Stakeholder(s): TransCanada

Overview: The proposed Upland Pipeline would provide crude oil transportation from multiple points in North Dakota and interconnect with the Energy East Pipeline System. The project consists of a 240-mile,
20 in. pipeline that would transport up to 300,000 bpd of crude oil produced in the Williston Basin across the U.S.-Canadian border. The project is expected to cost $600 million.

Progress: TransCanada has submitted applications for a Presidential Permit with the U.S. State Department, as well as other permits with the Canadian National Energy Board (NEB) and the North Dakota Public Service Commission. Pending approval, construction is expected to begin in 2019, with an in-service date of 2020.

Utica Marcellus Texas Pipeline Project

Location: Pennsylvania, Ohio, West Virginia, Louisiana and Texas
Stakeholder(s): Kinder Morgan

Overview: Kinder Morgan continues to develop its Utica Marcellus Texas Pipeline (UMTP) project and has filed for abandonment and conversion of 964 miles of natural gas service on the existing Tennessee Gas Pipeline (TGP), the construction of approximately 200 miles of new pipeline from Louisiana to Texas, new storage in Ohio and 120 miles of new laterals to provide basin connectivity. The approximately $4 billion UMTP project will be designed to transport propane, butanes, natural gasoline, Y-grade and condensate in batches along the system, with a maximum design capacity of 430,000 bpd.

Progress: The project remains in development. Pending approval, the pipeline is scheduled to be in service by the fourth quarter of 2018.

This is not a comprehensive list of the pipeline projects for the upcoming construction season. For updates regarding ongoing projects, refer to the Project Roundup on page 18 and published each issue.

North American Oil & Gas Pipelines provides quarterly reports of Canadian and U.S. pipeline projects. A report on Canadian oil pipeline projects appeared in the February issue, and upcoming reports on Canadian and U.S. gas pipeline projects will appear the August and November issues, respectively.

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.


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