Survey: Oh what a year

Multiple US midstream companies logged operational records in 2019 as a years-long building spree began to bear dividends in the form of rising flows to prime export markets on the Texas Gulf coast.

Enterprise Products Partners set 13 operational records in 2019, including nearly 2mn b/d exported from its marine terminals and 10.4mn b/d of oil equivalent transported across its network.

"Oh what a year," co-chief executive Jim Teague said to sum up the year. Enterprise announced that chief financial officer Randall Fowler will become co-chief executive with Teague. Teague, 74, said the change was not a sign that he is planning to retire. "I am not going anywhere," he said.

Enterprise has entered into an undivided joint interest with an ExxonMobil-led Permian pipeline joint venture (JV) known as the Wink-to-Webster project, which will carry 1mn-1.5mn b/d of crude and condensates from west Texas to the Texas Gulf coast. Under the agreement, Enterprise's 36-inch diameter Midland-to-Echo 3 pipeline, which is under construction, will become part of the larger Wink-to-Webster project.

‘We're looking at pretty good volume growth over the next couple of years flowing through those pipes," Fowler said.

Teague said that Enterprise recently signed a contract for 65,000-75,000 b/d with "a pretty big producer" that includes a "dock deal" with export options, which demonstrates "pretty strong contracts to support those pipes."

ExxonMobil and several JV partners, including Plains All American Pipeline, are planning the 650-mile Wink-to-Webster pipeline system from Wink and Midland in the Permian to multiple locations near Houston, including Webster and Baytown. The estimated start of service for the Wink-to-Webster JV pipeline system is early 2021.

Meanwhile NuStar Energy nearly doubled its Corpus Christi, Texas-area crude system volumes last year as new pipeline connections went into service. NuStar handled a record 150mn bl at its Corpus Christi export facility in 2019, and moved 92mn bl across its own docks.

Corpus Christi has become a key port for exports of US crude, with several midstream companies adding pipelines that terminate there.

Three new major pipelines started service in 2019 moving crude from the Permian basin to destinations in Corpus Christi – the 400,000 b/d Epic line, Plains All American Pipeline's 670,000 b/d Cactus 2, and Phillips 66's 900,000 b/d Gray Oak pipeline.

NuStar handled 613,000 b/d of crude at its Corpus Christi export facility in December, with about 70pc moving to its docks for export and 30pc moving back to refinery markets, the company said today while reporting fourth quarter earnings.

NuStar doubled volumes at Corpus Christi last year to 613,000 b/d. The increase in crude volumes followed the completion of two connections to the 670,000 b/d Cactus 2 crude pipeline which carries Permian crude to Corpus Christi, including an 8-mile, 30-inch pipeline from Taft, Texas, to NuStar's North Beach terminal.

Overall US crude exports hit a record high of about 3.7mn b/d in December, according to trade data released this month.

At the eastern Louisiana logistical hub of St James, NuStar has commitments to offload at least 10 unit trains. The St James facility was running at 43,000 b/d in December and could rise even higher in 2020, NuStar said.

St James is becoming an attractive destination for Canadian crude, both by rail and pipeline, because of the imminent reversal of the underutilized 1.2mn b/d Capline, which currently moves crude north from St James to Patoka, Illinois. A reversed Capline could begin carrying light crude to St James in mid-2021, with heavy capacity to begin in 2022.

NuStar has a multi-year rail contract in place at St James with a major Canadian producer, which could be extended beyond its initial three-year term, NuStar senior vice president Danny Oliver said.

Crude volumes on Plains All American pipelines in the Permian basin increased by 1mn b/d in the fourth quarter after the Cactus 2 pipeline went into service.

Plains' Cactus 2 went into initial service in August, and is expected to be in full service in April.

Magellan Midstream Partners is seeing "significant interest" in a plan to build a joint venture crude and condensate pipeline from Cushing, Oklahoma, to the US Gulf coast.

The company is talking to potential shippers but has not made a decision on whether to move forward with the Voyager pipeline, Magellan said on its 30 January earnings call.

"We've made progress but not enough progress to announce that we're starting the project," chief executive Michael Mears said. The pipeline needs to sign only one or two key shippers because the scale is smaller than competing projects, he said.

Magellan and Navigator Energy originally proposed Voyager as a new 500-mile (805km) line which would move various grades of light crude and condensate from the Cushing hub to Magellan's terminal in east Houston. The companies later added a Midland origin point. But the companies have been reworking the plan, including using a substantial amount of pipe that is already in the ground to save costs.

Under the plan, Voyager would have a connection to the 190,000 b/d Saddlehorn pipeline, which moves crude from Carr and Platteville in Colorado to Cushing. Saddlehorn is jointly owned by Magellan, Plains All American Pipeline, and Anadarko Petroleum. Magellan is in the process of expanding Saddlehorn to 290,000 b/d.

Differentials for key US basins