US midstream companies are delaying or scaling back their expansion plans to add capacity by more than 1.4 million bpd amid oil price collapse caused by efforts to contain the coronavirus pandemic. At least four projects have been deferred or scaled back, but some companies decided to proceed with other major projects.
Enterprise Products Partners deferred its 450,000 bpd Midland-to-Echo 4 crude pipeline as part of a $1.1-billion reduction in its 2020 capex. The project, which is an expansion of Enterprise’s infrastructure connecting the Permian to the Houston area, is postponed for about six months, with expected start-up pushed back to the second half of 2021.
Energy Transfer scaled back its proposed Ted Collins pipeline which will connect Nederland, Texas to a terminal in the Houston Ship Channel. It is originally designed to be a new build and has a capacity of 500,000 bpd. However, Energy Transfer now plans to use some existing infrastructure to save cost and downscales the capacity to 275,000 bpd, with the targeted start-up in the fourth quarter of 2021.
Phillips 66 paused the Red Oak project, a JV with Plains, which will connect Texas ports to the Permian and Cushing. It also halts the 350,000 bpd Liberty pipeline, a JV with Bridger, which will connect Corpus Christi to production areas in Rockies and Bakken. Both were initially planned to enter service in early 2021, but Phillips 66 said it would make a decision on whether to proceed with them later. Phillips 66 also postpones an FID on the Ace pipeline project linking St James, Louisiana, to refineries in the region.
However, other major projects are moving forward, although companies slash capex after the oil price crash. These projects include the 1 million-1.5 million bpd Wink-to-Webster crude and condensate pipeline system, which involves seven companies in a joint venture led by ExxonMobil. The pipeline will connect multiple locations near Houston to Wink and Midland in the Permian. Long-term contracts allow the project to be on schedule to enter service in the first half of 2021.
Energy Transfer also proceeds with the plan to expand its 570,000 bpd Bakken crude pipeline system to 750,000-1.1 million bpd, depending on talks with shippers. The pipeline system links North Dakota to the US Gulf Coast. Other projects that move forward include the expansion of the 200,000 b/d Diamond crude pipeline from Cushing, Oklahoma to Memphis, Tennessee, by Plains, and the reversal of the 1.2 million bpd Capline crude pipeline from Patoka to St James by Marathon, BP, and Plains.
