EPIC receives customer interest to sanction proposed crude pipeline
Published by Stephanie Roker,
EPIC recently revealed that it has received sufficient customer interest to sanction the proposed 730 mile crude pipeline running from the Permian Basin to Corpus Christi based upon volume commitments and acreage dedications. Following the successful open season originally initiated in March 2017, EPIC announced an additional 10 day open season in mid December 2017, to offer remaining firm-capacity out of both the Permian and Eagle Ford basins, with the latter having terminals in Gardendale and Helena.
The 730 mile crude petroleum pipeline runs across Texas from Orla in the Permian Basin to the Port of Corpus Christi with capacity up to 590 000 bpd. The project includes terminals in Orla, Pecos, Crane, Wink, Midland, Helena and Gardendale, with Port of Corpus Christi connectivity and export access.
Expected to be in-service in 2019, the EPIC crude pipeline is being laid alongside EPIC’s previously announced NGL pipeline system, which is currently under construction. Right-of-way (ROW) acquisition commenced back in October 2017 after the EPIC NGL project was kicked off.
Distinctive to the EPIC crude project relative to traditional mainline pipeline commercial formats, customers have been provided the opportunity to make commitments through volume or acreage dedications.
Acreage dedication shippers for the crude project include Noble Energy, which is finalising agreements with EPIC to dedicate substantially all of its gross acre position in Reeves County up to 75 000 bpd of oil. EPIC is in advanced discussions with numerous other producers in the Permian Basin to secure acreage dedications on similar terms.
Separately, another company has made an additional volume commitment of 75 000 bpd of oil.
Noble Energy and EPIC are finalising the terms of a strategic relationship that will include an option to contribute equity in exchange for an ownership stake in the crude pipeline. Similarly, Noble will receive an option to participate in the EPIC NGL project currently under construction. The options, which include up to 30% ownership in the crude pipeline and up to 15% ownership in the NGL pipeline, expire in January of 2019 and can be exercised through Noble Energy, Inc. or its MLP subsidiary, Noble Midstream Partners LP.
EPIC CEO Phillip Mezey said: “Bringing in a strategic partner such as Noble greatly enhances the crude and NGL projects. We believe EPIC offers a differentiated value proposition to producers by providing a low cost transportation option from the Permian Basin to Gulf Coast markets that includes no risk of deficiency through acreage commitments for Permian producers. It is also notable that there is a meaningful amount of capital and operating synergies between the crude and NGL projects as they will share ROW and site locations.”
Read the article online at: https://www.worldpipelines.com/project-news/03012018/epic-receives-customer-interest-to-sanction-proposed-crude-pipeline/
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