The crude oil hub at Cushing, OK, has more than 90 MMbbl of tankage, 3.7 MMb/d of incoming pipeline capacity and 3.1 MMb/d of outbound pipes. That’s an impressive amount of infrastructure by any standard. The real marvel of the place, though, is the variety of important roles it plays and services it provides for a wide range of market participants — producers, midstream companies, refiners and marketers, as well as producer/marketer and refiner/marketer hybrids. To truly understand Cushing — what it does and how it works — you need to know the hub’s assets and how they fit together. Today, we continue a series on the “Pipeline Crossroads of the World” with a look at the companies that own Cushing storage capacity and how that storage is put to use.
This is the second episode of a multi-part review of the Cushing hub, whose infrastructure, key players and operations RBN has been researching and analyzing for the past several months. As we discussed in Part 1, Cushing’s role in the crude market has been in flux. Permian oil production has been surging, the ban on U.S. oil exports is a fading memory, and the Gulf Coast — not Cushing — is where most U.S. crude production wants to go, for its concentration of refineries and export docks. But while Cushing’s role has been morphing as the Shale Revolution plays out, it still provides critical support to producers, midstreamers, refiners and marketers. To put it bluntly, crude-market participants need Cushing, and it’s here to stay.
So what exactly is in Cushing? Who owns it? Who uses it? And what do they use it for? We’ll start with storage — the real “hub” of the hub — and get to the “spokes” (the pipelines in and out of Cushing) later. Cushing-area storage facilities cover almost 5,000 acres and include about 350 huge, aboveground storage tanks, some of which are capable of holding up to 600 Mbbl. There are actually two centers of storage capacity at Cushing: a much larger group of contiguous storage facilities in Cushing South (dashed yellow rectangle in Figure 1) and a smaller, more scattered group of storage assets in Cushing North (dashed red rectangle). The town of Cushing is in the middle (dashed blue rectangle).