Permian-to-Gulf-Coast-pipeline gains more shale oil commitments

By Luke Geiver | July 05, 2017

Enterprise Product Partners has Permian Basin shale oil producers lining up to utilize its crude oil pipeline. This week, the company—one of the largest publicly traded midstream energy service provider in North America—said it has added additional long-term contracts with Permian producers for volume commitments on its Midland to ECHO pipeline system. The ECHO terminal is a storage and distribution hub located in Sealy, Texas, near Houston.

“Our Midland to ECHO crude oil system is attractive to large producers in the Permian that control and market their own production,” said Jim Teague, CEO for Enterprise. The transportation system will connect Permian producer to the Texas Gulf Coast and international markets through Enterprise’s export marine terminals on the Houston Ship Channel, according to the company.

“We believe access to waterborne international markets is essential to Permian producers to maximize the value of their light crude oil and condensate production,” Teague said.

The new volume commitments from Permian producers puts the daily volumes that will eventually move through the system at 335,000 bpd. Total capacity of the system is 450,000 bpd.

Limited commercial activities of the Midland to Sealy system could begin by the end of this year. By the end of 2018, the full system will be in service. The pipeline will include the capability to batch four grades of crude oil.

With the recent volume commitments, the pipeline is now committed to move 405,000 bpd.