Every day, another 4.5 million barrels of Permian crude oil begin the journey from wells in West Texas and southeastern New Mexico to refineries in the U.S. and abroad. For most of that oil, it’s no simple trek. Not only does it wend its way through gathering systems and shuttle pipelines to nearby hubs, it often needs to be directed between terminals within those hubs to reach the specific outbound, long-haul pipe that will take it to where it needs to go. We get it — you probably don’t need to know about every nook and cranny in the multi-terminal hubs at Midland, Crane, Wink, and elsewhere in the Permian, but it sure would help to understand generally how the flow of oil to market works, and why a terminal’s ability to provide destination flexibility is so crucial. Today, we continue our series on Permian hubs and terminals with a real-world example of how a barrel of Delaware Basin crude oil moves to Corpus Christi, Houston, or Cushing.
As we said in Part 1, storage and distribution hubs play critical roles in choreographing the transport of crude oil from the lease to end-users and in enabling traders and others to take advantage of commercial opportunities. This is especially true in the Permian, the U.S.’s leading oil-producing region, where a number of hubs have developed over the past few years to keep pace with production growth and pipeline build-outs. We also questioned the widely held view that the sudden fall-off in Permian production last year and the current expectation for only modest production growth in 2021 and beyond has left the region overbuilt from a midstream infrastructure perspective. In fact, while the Permian generally has sufficient takeaway capacity, there has been recent evidence of tightness in the Permian storage market.
In Part 2, we zoomed in on the hub in Crane, TX, which has a slew of inbound pipelines from the Delaware Basin and a handful from the Midland Basin; 10 terminals with a combined storage capacity of about 7 MMbbl (including about 1 MMbbl now under construction); and direct or indirect connections with just about every takeaway pipeline to the Cushing hub or the Gulf Coast (Corpus Christi, Houston, Beaumont/Nederland, you name it.)
As we see it, the 10 terminals at Crane fall into one of three general categories:
- Terminals that are connected to inbound gathering systems and/or shuttle pipelines but have no direct connections to outbound pipelines — instead they have pipeline ties within the Crane hub to other terminals that do connect directly to outbound pipes. These include the 180-Mbbl Medallion Terminal (purple box in Figure 1), owned by Medallion Midstream, which receives crude from the company’s Delaware Express and Medallion Pipeline systems; the 160-Mbbl Centurion Terminal (orange box), owned by Lotus Midstream, which receives oil from Lotus’s Augustus Pipeline; and the 130-Mbbl Noble Terminal (pink box), owned by Noble Midstream Partners, which receives oil from Noble Midstream’s Advantage Pipeline.
- Terminals that are linked to inbound gathering and/or shuttle pipelines and have direct connections to outbound pipelines to Midland, as well as indirect connections within the Crane hub to other takeaway pipes. These include the 1-MMbbl Oryx Terminal (aqua box), owned by Oryx Midstream, which receives crude oil from Oryx’s Trans Permian Pipeline, and the 160-Mbbl Enterprise Terminal (lavender box), owned by Enterprise Products Partners, which receives local production from Enterprise-owned gathering pipelines.
- Terminals that are connected to inbound gathering, shuttle, or long-haul pipes and have direct connections to outbound pipelines to the Gulf Coast and/or the Cushing hub in Oklahoma. These include the 1.25-MMbbl EPIC Terminal (green box), owned by EPIC Midstream, which receives crude from the EPIC Crude Pipeline; the 650-Mbbl Phillips 66 Terminal (red box), owned by Phillips 66, which receives oil from the Gray Oak Pipeline; the 500-Mbbl Plains/Crane West and 250-Mbbl Plains/Crane East terminals (blue boxes at center and right), owned by Plains All American, which receive oil from Plains’ Basin System; and the 1.7-MMbbl Magellan Terminal (yellow box), owned by Magellan Midstream Partners, which receives oil from the Medallion Pipeline system and sends oil out on Magellan’s Longhorn Pipeline to Houston.
Figure 1. Crude Oil Terminals in Crane. Source: RBN
We’re hydrocarbon infrastructure geeks, and we’ve put in the time to fully understand how all of the pipes, tanks, and other assets at Crane interrelate — that is, how crude oil that comes into the hub on Pipeline A can be blended and/or staged within Crane and then sent out on Pipeline X, Y, or Z to Corpus Christi, Houston, etc. Still, we get that it might be tedious for you to read about how oil flows through each and every one of the various terminals within Crane to its takeaway pipelines of choice. Instead, we decided it would be best to describe a couple of representative examples of how all this works, first by focusing on the Oryx Terminal at the western end of Crane.
As we said just above, the Oryx Terminal (aqua rectangle at far left in Figure 2) has 1 MMbbl of storage capacity; the facility was built to receive crude oil from the southern Delaware Basin via Oryx Midstream’s Trans Permian Pipeline system, then store, blend, and stage the oil for delivery to various downstream points. More specifically, the terminal receives crude via two legs of the Trans Permian system, both of which are fed by gathering hubs in Reeves County: a 24-inch-diameter line from its Pecos Station northwest of Pecos, TX, and a 16-inch line from its Reeves Station southeast of Pecos (aqua arrows at far left; see Have it All for more on Oryx’s gathering lines).
There are four Oryx Midstream-owned pipelines out of the Oryx Terminal, also indicated by aqua arrows. First, there are two parallel pipelines to the Midland hub, one a 16-inch line to the Enterprise terminal in Midland and the other a 24-inch line to Oryx’s terminal in Midland, which connects to Plains’ terminal there. From Enterprise’s Midland terminal, crude can flow to Houston on one of Enterprise’s Midland-to-ECHO pipelines, ECHO referring to the company’s Enterprise Crude Houston Oil terminal. From the Plains terminal, oil can flow on the Basin/Sunrise/Mesa systems to Colorado City (where it can access Energy Transfer’s Permian Express I pipeline to Nederland, TX), Wichita Falls, and on to Cushing. Barrels also can flow back south on Plains’ intrabasin pipelines to access the company’s Cactus and Cactus II pipelines to Corpus Christi. So just factoring in those two outbound pipes, we’ve already seen that crude can make its way to any of the major Texas Gulf Coast crude markets: Corpus Christi, Houston, and Beaumont/Nederland.
Figure 2. Terminals and Inbound, Intra-hub, and Outbound Pipelines at Crane. Source: RBN
The other two pipes out of the Oryx Terminal are intra-hub conduits — that is, they flow to other terminals in Crane that are, in turn, connected to two major bullet pipelines to the Gulf Coast. The first of these two intra-hub connections is a 24-inch line from the Oryx Terminal to the Phillips 66 Terminal (blue-rectangle labeled “Phillips 66” in Figure 2), which is directly connected to the 900-Mb/d Gray Oak Pipeline to Corpus Christi (blue arrow out of P66 Terminal). The Oryx Terminal’s second intra-hub link is a 16-inch pipeline to the Magellan Terminal (yellow rectangle labeled “Magellan Midstream Partners”), which is directly connected to Magellan Midstream’s 275-Mb/d Longhorn Pipeline to Houston (yellow arrow out of Magellan Terminal). Once crude oil reaches the Gulf Coast at either Corpus, Houston, or, as mentioned above, Beaumont/Nederland, it can access not only the Gulf Coast industrial refinery complex but also can be sent to exports docks for shipment to anyplace in the world (check out our Crude Voyager for weekly exports by region and terminal).
The point here is that while crude oil transported from the Delaware Basin on the Trans Permian Pipeline only flows into one terminal at Crane (Oryx’s), the four pipes out of that terminal — two to Midland and two to other terminals within Crane — provide shippers on Trans Permian with a high degree of destination flexibility. In addition, the storage at the Oryx Terminal provides shippers and other users with tankage they can use to manage inflow/outflows, blend crude oil to meet the specifications of downstream buyers, and even store crude for commercial purposes (see Skipping the Crude Contango for more about that).
In the next blog in this series, we’ll go through one other example of how crude oil flows through the Crane hub. In that case, we’ll be looking at a midstreamer that receives, blends, and stages a wide variety of crude oil grades from its own gathering systems in the Delaware Basin, from other Delaware gatherers, and from its own terminal in Midland before sending oil on to the Gulf Coast.
"Wide Open Spaces" was written by Susan Gibson. It appears as the second song on side one of The Dixie Chicks’ (now called The Chicks) fourth studio album of the same name. Released as the third single from the LP in August 1998, the song went to #1 on the Billboard Hot Country Songs chart and #41 on the Billboard Hot 100 Singles chart. The song won the Country Music Association's award for Single of the Year and Music Video of the Year in 1999. Personnel on the record were: Natalie Maines (vocals), Emily Erwin (acoustic guitar, banjo, dobro, vocals), Martie Seidel (fiddle, mandolin, vocals), and various session musicians.
The album Wide Open Spaces was recorded between March and August 1997, with Blake Chancey and Paul Worley producing. Released in January 1998, it went to #1 on the Billboard Top Country Albums chart and #4 on the Billboard Top 200 Albums chart. It won two Grammy Awards in 1999, has been certified 13x Platinum, and given Diamond status by the Recording Industry Association of America. Five singles were released from the LP.
The Chicks (previously known as The Dixie Chicks) are an American country music group formed in Dallas in 1989 by sisters Martie and Emily Erwin. Martie (now Martie Maguire) and Emily (now Emily Strayer) brought Natalie Maines into the band as the lead singer in 1995. In June 2020, the band changed its name to The Chicks. They have released eight studio albums, two live albums, and 25 singles, and have sold more than 33 million records worldwide. Five members have passed through the ranks of The Chicks since their formation. They continue to record and tour.