Buoyed by record crude oil flows and the expectation of further growth in Western Canada, Enbridge has been sanctioning more pipeline expansion projects and discussing plans to add more capacity.
The crude oil hub in Patoka, IL, is in many ways a smaller version of the hub in Cushing, OK. Like its larger sibling, Patoka receives a broad variety of crudes from Western Canada, the Bakken, and other production areas, stores and blends oil, and sends it out to refineries and Gulf Coast terminals tied to export docks. In Patoka’s case, there are only five major incoming pipelines that directly connect to the hub, but many of them receive crude from a number of upstream systems, some as far away as the Alberta oil sands. Important for Patoka’s future, a few of the pipelines feeding the hub are being expanded. Today, we continue our series on the second-largest oil hub in PADD 2 with a look at the pipelines that flow into Patoka and the sourcing of their crude.
The crude oil hub in Cushing, OK, is larger and grabs the headlines, but don’t you forget about the Patoka hub in south-central Illinois. It plays critically important roles in receiving Western Canadian, Bakken, and other crude, distributing it to a slew of Midwestern refineries, and directing oil south to the Gulf Coast on the Energy Transfer Crude Oil Pipeline to Nederland, TX — and soon on Capline to St. James, LA, when reversed flows on that large-bore pipe begin in early 2022. Better still, there are great stories behind the development of the Patoka storage and distribution hub and how it works. Today, we begin a series on the second-largest crude oil hub in PADD 2 and why, with the upcoming Capline reversal and other changes, the hub is more relevant than ever.
Phillips 66 loaded its first Panamax tanker for export to Mexico over the weekend. Late on Sunday night, the SCF Prime signaled that it was headed for Pajaritos, Mexico, after loading at Phillips' terminal in Beaumont, TX. Mexico is making history with this pivotal first purchase of Bakken crude from Phillips 66 at the U.S. Gulf Coast (USGC). Up until now, the crude oil trade between the U.S. and Mexico had been a one-way street, with oil moving from Mexico to the U.S. and not the other way around. But now, as Mexico’s state-run oil company Petróleos Mexicanos (Pemex) faces dwindling oil production and refinery outputs, importing light, sweet crude from the U.S. is a new avenue to revive Mexico’s refinery utilization. Today, we examine the new shift in the traditional flows of crude oil across the Gulf of Mexico.
For the past five years, crude oil producers in the Bakken have depended on railroads to transport a significant share of their output to market—there simply hasn’t been enough pipeline capacity out of the tight-oil play. Now, construction of the long-awaited, 450 Mb/d Dakota Access Pipeline (DAPL) is finally poised to begin, and a late-2016 online date for DAPL is planned. DAPL’s capacity would enable producers to further reduce their use of crude-by-rail, but with Bakken production on the decline, will DAPL really be needed? And what about additional out-of-the-Bakken takeaway capacity being planned? Today, we consider the challenges and pitfalls of developing midstream infrastructure in fast-changing markets, focusing on Bakken crude.
