Plains All American’s forthcoming Cushing, OK,-to-Longview, TX, pipeline is on schedule to begin line fill in the third quarter with operations expected to start in the fourth quarter, according to Genscape’s July 17 flight of the pipeline right of way. Several work crews were observed along the right of way, with piping still exposed and significant stretches undergoing excavation.
During the flight, Genscape observed two new external floating roof storage tanks at a small existing Plains’ facility adjacent to the pipeline right of way in Carter County, OK. The tanks were nearly complete, and construction on the two tanks appeared to have made significant progress since February, the last month that publicly available satellite imagery is available.
As of December 2015, construction on the tanks had not started, according to publicly available satellite imagery.
Plains, the sole owner and operator of the pipeline, has owned the facility since at least 2010, according to Carter County property records. The company was granted initial approval by the Oklahoma Department of Environmental Quality to construct and operate the new tanks in September 2013.
During the flight, Genscape also observed additional pumping capacity being installed at the Carter County facility. Aside from the origin point in Cushing, the Carter County facility contained the only pumps observed during the flight that were likely associated with the Cushing-to-Longview pipeline. As recent as February, publicly available satellite images showed that no pumping capacity existed, but land was being cleared for that purpose.
The right of way for the Cushing-to-Longview pipeline traverses a similar route to Plains’ existing 22,000 bpd Red River pipeline, but the new pipe has additional connectivity to Plains’ Cherokee 18,000 pipeline system and potentially Plains’ 450,000 bpd Basin pipeline. Plains began acquiring easements for Cushing to Longview’s right of way in August 2015, according to county property records.
The Cushing-to-Longview pipeline will have an initial capacity of 125,000 bpd, and is expandable up to 150,000 bpd subject to additional shipper demand, according to Plains. Line fill for this pipeline is approximately 450,000 bbls.
As a part of the project, Plains is also expanding an existing system from Longview to Shreveport, LA. From there, crude will either be transported to Shreveport refineries or connect to the 100,000 bpd Permian Longview and Louisiana Extension (PELA) to Anchorage, LA. According to a recent U.S. Federal Energy Regulatory Commission filing, PELA was able to begin operating as early as July 1, though it is not clear whether flow has started on the pipeline. Plains currently has 55,000 bpd minimum volume commitments from refineries in Shreveport, according to a Plains investor presentation from May.
Once operational, Cushing-to-Longview will increase total pipeline capacity from Cushing to about 2.691mn bpd from 2.566mn bpd, compared to 3.547mn bpd of existing incoming pipeline capacity (which includes the addition of the 340,000 bpd Saddlehorn-Grand Mesa in September).
At the end of 2016, the Cushing hub net pipeline balance should be 856,000 bpd, with incoming volumes outpacing outgoing. The only additional Cushing-connected pipeline proposed at this time is the 200,000 bpd Diamond pipeline from Cushing to Valero Energy’s 195,000 bpd Memphis, TN, refinery. That pipeline is expected to be operational in late-2017.
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