Plains All American

With Western Canadian oil sands bitumen output increasing rapidly, producers need more diluent to blend with their production so that it can flow to market in pipelines. That means delivering diluent to remote locations as far as 250 miles northwest of Edmonton. Smaller oil sands projects typically get their diluent delivered by rail or truck but pipeline infrastructure is being built out for larger projects as their production comes online. Inter Pipeline (IPL) diluent delivery volumes on their Polaris pipeline at the end of 2013 were just 20 Mb/d. By 2017 that volume could be to 1.2 MMb/d. Today we detail IPL and Plains build out plans.

By Q2 of 2015, the Plains and Enterprise joint venture pipeline in the Eagle Ford will carry up to 470 Mb/d of crude and condensate to market in Houston and Corpus Christi including barrels shipped from the Permian Basin on the Cactus pipeline. This pipeline expansion will easily make the two-midstream operators the largest players in the Eagle Ford market. On top of that, Enterprise already has a leg up in the race to crank up condensate exports – having recently won one of the coveted BIS letters. Today we describe recent expansions in these two company’s Eagle Ford networks.

Permian Basin crude production is expanding rapidly. At over 1.5 MMb/d it already represents nearly 19 percent of total US crude output. Midstream companies are busy developing more than a dozen gathering system extensions and additions to deliver Permian production to about 1 MMBbl of mainline pipeline capacity coming online between the start of 2013 and 2015. In today’s blog we detail planned improvements to the Basin and Cactus pipelines.

North Dakota Bakken crude production continues to grow at record rates with nearly 770 Mb/d produced in December 2012 up 40 percent since January 2012. The North Dakota Pipeline Authority estimates that 64 percent of that crude was transported to market by rail in December. After local refinery consumption (80 Mb/d) that means 440 Mb/d moving by rail. Today we continue our survey of North Dakota crude rail loading terminals with an in-depth look at three midstream companies that between them can potentialy load 280 Mb/d of crude in North Dakota.

When Plains All American began building out their terminal at St. James in 2004 the business model was based on crude imports flowing through LOOP. That had to change gears along with the market.  Since then they have developed a successful business transporting condensate to Western Canada – that is now being supplied from the Eagle Ford basin. Plains also built a crude rail unloading facility at St. James before crude by rail hit the headlines. Today we describe how Plains successfully leveraged their St. James terminal assets.

After NYMEX WTI climbed higher all last week, topping $90/Bbl, euro-zone worries yesterday caused a 4 percent fall in crude to close at $88.14/Bbl. That is a still a long way above  estimates of $50/Bbl break-even prices for crude produced from Eagle Ford shale. Oil production in the Eagle Ford is now close to 600 MB/d and estimated by Bentek to rise to over 700 MB/d by the end of this year. This South Texas play is attracting producers like bees to a honey pot. Midstream infrastructure projects are springing up left right and center. In the first of a series we look at how Eagle Ford crude prices compare to the Bakken.