NEW YORK, Jan 30 (Reuters) – Enterprise Products Partners LP said on Thursday it will own a 29% undivided joint interest in the Wink-to-Webster crude pipeline system and construction on the segment to Webster, Texas, is expected to be completed by the end of 2020.
The company said its Midland‐to‐ECHO 3 crude pipeline, which will be a part of the Wink-to-Webster system, is expected to be in service in the third quarter of this year.
“I don’t expect more than 200,000 to 300,000 barrels a day to flow until the Webster leg is complete,” Jim Teague, co-chief executive officer, said on its quarterly earnings call.
The Wink-to-Webster Pipeline System is expected to transport more than 1 million barrels per day (bpd) of crude oil and condensate from the Permian, the largest U.S. shale basin, to the Gulf Coast.
The project is a joint venture between affiliates of Exxon Mobil Corp, Plains All American Pipeline LP, MPLX LP among others.
Enterprise’s Midland-to-ECHO 4 pipeline is expected to be in service by the second quarter of 2021. The system transports crude from Midland, Texas, the heart of the Permian basin, to Enterprise’s ECHO terminal in Houston.
In 2021, Enterprise said it expects to see an increase in crude volumes going through the Midland-to-ECHO pipeline system, saying the pipelines were backed by firm commitments from oil producers.
Midstream companies have raced to add pipeline capacity from the Permian to the Gulf Coast as a shale boom has helped send U.S. crude exports to record highs.
However, the pace of new pipeline projects has slowed as production growth is expected to ease due to producers’ plans to reduce spending on new drilling for a second year in a row in 2020.
Transportation volumes on its Midland-to-ECHO 1 pipeline increased 7% in the fourth quarter of 2019 compared to a year earlier. Total crude oil marine terminal volumes rose 38% to 926,000 bpd in the fourth quarter compared to 673,000 bpd a year earlier, the company said.
The company’s Midland-to-ECHO 2 pipeline, which was converted from natural gas liquids (NGL) to crude service, is likely to remain in crude service for the foreseeable future, a company executive said on the call. (Reporting by Devika Krishna Kumar in New York; Editing by Tom Brown)