(Midstream Business – April 2013) The State Of ECHO (By Jennifer Postel)
http://www.midstreambusiness.com/
As it nears completion, Enterprise Products Partners’ Houston ECHO terminal is expected to link the growing North American oil supply—causing an unprecedented glut at the Cushing, Oklahoma, hub—with Gulf Coast refineries. But as storage dwindles at the country’s most popular hub, where does the project stand today?
The unprecedented rise in domestic crude oil production has created tremendous change for the U.S. Gulf Coast refining market, including an advantageous position for some midstream logistics companies.
With U.S. domestic production at 7 million barrels (bbl.) per day, as well as increased Canadian production, there’s an increasing flood of inland crude creating a bottleneck at the Cushing, Oklahoma, trading hub that needs alleviation. Many in the industry anticipate a host of pipeline projects will bring more than 3 million bbl. per day from Cushing and South Texas to the Gulf Coast, helping relieve the crude oil stockpile.
But it is possible “the Cushing backlog will essentially just transfer to Houston,” Sandy Fielden, director of analytics at RBN Energy, tells Midstream Business.
And, Fielden says, terminal operators are currently expanding or building storage terminals equipped with nearly 19 million bbl. of capacity.
“Some facilities are older, some are new. Some are in Houston and some are in Louisiana,” he says. “They are all trying to address the same issue. Someone is going to need to redistribute the incoming crude, and there is a lot of money to be made if they are in the right place.”
Expected demand
Aiming to capitalize on this expected demand, Enterprise Products Partners LP is in the midst of constructing the ECHO crude oil storage and terminal facility, located outside Houston in southeast Harris County, Texas. Of that expected 19 million bbl. of capacity, Enterprise estimates that the ECHO facility could have as much as 6 million bbl. of crude oil storage capacity when completed.
The terminal will be connected to both the Enterprise owned Eagle Ford crude pipeline from South Texas and the Seaway line that runs between Cushing and Freeport, Texas, once the company completes an ECHO-to-Jones Creek, Texas, pipeline in the third quarter of 2013. Jones Creek, outside Feeport, is Seaway’s southern terminus.
Once completed, the ECHO terminal will offer access to major Texas Gulf Coast refining centers in Texas City, Pasadena/Deer Park, Baytown and along the Houston Ship Channel. ECHO will also be connected to the Enterprise marine terminal at Morgan’s Point on the ship channel.
