Plains to expand major new Permian Basin pipeline in Texas
Plains All American aims to expand its new Cactus Pipeline to move West Texas oil to Corpus Christi, increasing the company’s ability to move super-light crude to the Texas Gulf Coast for possible export.
The move further positions Plains to export minimally processed condensate if it chooses to do so. Pressure from oil producers to scrap the decades-old domestic crude export ban has grown as super-light condensate emerging from the U.S. shale oil boom overwhelms refineries with limited capacity to handle it.
Cactus will connect with Plains’ joint-venture line at the company’s Gardendale hub in La Salle County, and Plains’ partner in that line, Enterprise Products Partners, already has government approval to export minimally processed condensate.
Plains on Monday said it will push the 250,000 barrels per day, 310-mile (498 km) Cactus line’s capacity to 330,000 bpd. The initial 250,000 bpd remains on track to start up in April, with the additional 60,000 bpd to come online in the fourth quarter next year.
The Cactus expansion comes after Plains and Enterprise said earlier this month that they would expand condensate-gathering facilities in Texas as well as their joint-venture line that runs from the Gardendale hub to Three Rivers and then to Corpus Christi.
The 350,000 bpd joint-venture line, already being expanded to 470,000 bpd, will exceed 600,000 bpd by the third quarter next year.
Plains also operates an 80,000 bpd condensate stabilizer where Cactus will connect to the joint-venture line. The stabilizer will expand to 120,000 bpd in the second quarter next year.
According to the approvals given to Enterprise and two other companies from the U.S. Department of Commerce, condensate that has been run through a stabilizer, which removes natural gas liquids, has been sufficiently processed to be an exportable refined product.
BHP Billiton Ltd has launched a tender to sell a 650,000-barrel condensate cargo early next year, having decided not to wait for explicit government approval.
On Nov. 6 Plains Chief Executive Greg Armstrong told analysts that Plains has concluded that its processed condensate would meet requirements for export, and a holdup in additional Commerce approvals was “frustrating to us and other exporters.”
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