Oil companies join EPIC pipeline project to connect Permian with Gulf Coast
Oil and gas companies are joining in on a pipeline that could transport crude oil from the petroleum-rich Permian Basin, across Texas to Gulf Coast refineries near Corpus Christi.
Texas-based EPIC Midstream Holdings announced multiple strategic partnerships on May 10 for the EPIC Crude Oil Pipeline, an oil-carrying line that will run side-by-side with EPIC’s natural gas liquids (NGL) for about 730 miles.
The project, intending to link vast underground oil shales with the refineries needed to put the product to market, was backed by capital commitments from funds managed by California-based Ares Management, a private equity group, read an EPIC news release.
“We are excited to be partnering with some of the leading energy companies in the world to develop these critical infrastructure assets,” said Nate Walton, partner at Ares Management.
Houston-based Apache Corporation and Noble Energy committed to anchor the pipeline, the release read, for a total capacity of 590,000 barrels per day.
“Partnering with Apache and Noble Energy adds tremendous strategic value to EPIC as we build out our crude footprint,” said Phillip Mezey, chief executive officer of EPIC Pipeline.
Apache will have the option to acquire up to 15 percent of the equity from the oil line, while Noble could acquire up to 30 percent, and 15 percent of the NGL pipeline, per the respective deals until the first quarter of 2019.
Brian Freed, Apache senior vice president of midstream and marketing said the project could augment transportation of oil across the region, complimenting ongoing efforts by Apache to capitalize on its 2016 discovery of Alpine High, an oil, NGL and gas field near Pecos, Texas.
“As one of the largest acreage holders in the Permian Basin, Apache’s participation in the EPIC Crude Oil Pipeline helps to ensure takeaway capacity for our production from the region," Freed said. “The partnership enhances our long-term operational flexibility and market optionality in our Delaware and Midland Basin focus areas.”
About 440,000 barrels per day will come from the Permian Basin, while 150,000 barrels per day are expected from the Eagle Ford formation in southern Texas.
If the line is upsized to a 30-inch line, daily Permian capacity could increase to 675,000 barrels per day, the release read.
Apache has secured about 75,000 barrels per day of firm capacity, while Noble Energy purchased 100,000 barrels per day.
At least 10 percent of the system capacity will be reserved for uncommitted shippers, read the release.
In total, 500,000 acres were dedicated the project, which included donations from Apache and Noble Energy.
The pipeline will start in Orla, Texas, stopping at numerous terminals across the Lone Star State in Pecos, Saragosa, Crane, Wink, Midland, Helena and Gardendale.
The Port of Corpus Christi will also provide export capabilities, supporting the Delaware, Midland and Eagle Ford basins.
Right of ways for the project were secured, and construction is expected to begin in late 2018, with the system going online during the last half of 2019.
The third and final phase of the NGL pipeline, connecting to Corpus Christi will be finished by the second half of 2019, read the release. That line is anchored by BP Energy Company, with a strategic agreement with Salt Creek Midstream.
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.