I Can See Clearly Now - Assessing The Impact of Plains' Sunrise Crude Pipeline Expansion

It’s been nine months since Plains All American’s Sunrise II crude oil pipeline started service out of the Permian to the Wichita Falls, TX, crude hub. In that time, it has transformed the balance of supply versus downstream takeaway capacity at Wichita Falls and become a critical conduit of Permian crude to the Cushing and Gulf Coast markets. What’s more, Plains is planning to build the Red Oak Pipeline from Cushing through Wichita Falls to the Gulf Coast in 2021, which will further solidify Sunrise II as an important outlet for Permian oil for some time. With two other new long-haul Permian crude pipelines — EPIC and Cactus II — days away from starting interim service to the Gulf Coast, an analysis of Sunrise II’s impacts thus far provides some clues as to how future expansions will reshape the region. Today, we discuss how Plains’ Sunrise II project has affected crude oil flows from the Permian to Wichita Falls, and from there to Cushing and the Gulf Coast, as well as what its role will be when Red Oak comes online.

We’ve blogged a lot about the Permian this year, with a focus of late on the midstream expansions taking place within the basin. (See our Have It All series for more on existing and planned crude gathering systems there.) We also have looked at long-haul expansions and the potential snags in their operational start-ups in Easy To Be Hard. Today, we consider how one of the largest recent expansions, Plains All American’s 500-Mb/d Sunrise II project, has impacted not only flows out of the Permian but also the workings of the crude oil hub at Wichita Falls and points beyond.

The Figure 1 map shows how the Wichita Falls hub fits in. While flows into and out of the hub have changed somewhat over the last few years, the hub has long been supplied from the Permian by Plains’ Basin pipeline system (navy-blue line). Permian oil arriving at Wichita Falls moves out of the hub on pipelines headed to Cushing and Nederland, TX, as well as to regional refineries. These refineries, which include Valero’s 90-Mb/d Ardmore facility (black diamond in Figure 1) in Ardmore, OK, and 200-Mb/d McKee facility (off the map) in the Texas Panhandle town of Sunray, are supplied by NuStar Energy-operated pipelines (light-blue line) that pick up supply at Wichita Falls. Most of that supply is provided by Basin and now Sunrise II (dark-green line), while some locally produced crude oil is also delivered into the Wichita Falls hub by gathering systems in the immediate area (not shown). Significant volumes of crude are also moved out of the hub via Energy Transfer’s Permian Express I pipeline (purple line). For its part, Permian Express I provides service all the way to Nederland on pipelines that used to move volumes north into Wichita Falls but were reversed a few years ago. The pipelines headed north to Cushing include a leg of Basin plus the Phillips 66 Oklahoma Mainline (yellow line in Figure 1) and ARB Midstream’s Texoma Pipeline (green line), another recently reversed pipe. Finally, Wichita Falls is expected to become an interim stop on Plains’ planned Red Oak Pipeline (dashed red line), which will extend from Cushing to Sealy, TX (at the western edge of the greater Houston area), and from there to Houston and Corpus Christi.