Plains All American plans to expand capacity on its 250,000 b/d Cactus crude oil pipeline carrying Permian crude from west Texas to Gardendale, Texas, to about 390,000 b/d by the end of the third quarter, the company said.
At Gardendale, the 310-mile pipeline connects to Plain's 660,000 b/d Eagle Ford JV pipeline, a 50:50 joint-ownership asset with Enterprise that serves Three Rivers and Corpus Christi, Texas, and can access the Houston area via Enterprise's South Texas pipeline system.
A direct route to Occidental Petroleum's new 300,000 b/d crude export facilities in Ingleside, Texas, near Corpus has increased shipping interest on the existing Cactus pipeline, likely encouraging Plains' expansion plans.
West Texas Intermediate (WTI) crude from Midland, Texas, is increasingly being shipped through the Cactus system to Ingleside, where it is emerging as the grade of choice for US exports to Asia and potentially Latin America because of its direct water access with the ability to bypass the often congested Houston Ship Channel.
Peruvian state-owned PetroPeru, a frequent importer of US domestic sweet (DSW) blend that travels through the Seaway and Marketlink pipelines, recently upgraded its list of eligible import grades to include WTI Midland by way of Cactus.
Plains aims to "provide additional takeaway capacity for increasing Permian basin crude oil production" with the project.
Production increases in the Permian basin are expected to push US shale output higher by 41,000 b/d month-on-month to roughly 4.75mn b/d in February, the US Energy Information Administration (EIA) said 17 January in its latest Drilling Productivity Report.
