Permian-to-Cushing pipeline planned, is Memphis oil’s last stop?
A well-established pipeline provider in the Permian Basin has announced plans to move oil from West Texas northeast to the nation’s largest oil storage hub in Cushing, Oklahoma. Plains All-American Pipeline L.P. has officially started an open season call to oil producers in West Texas allowing them to commit oil volumes to the pipeline gathering system consisting of new or existing infrastructure that will move oil to Cushing.
Origin points for oil gathering connections will be in the Texas communities of Midland and Colorado City. According to Plains All American, the pipeline system could be operational by 2019 should sufficient commitments from shippers come through by the open season call set for May 30. Like most open season calls from pipeline entities to oil or gas producers, potential shippers must sign confidentiality agreements before receiving open season documents.
Should the volume commitments by oil producers be sufficient for Plains All American to go through with the proposed Permian-to-Cushing connection, up to 350,000 barrels of oil per day takeaway capacity could be added to the Permian play.
Plains All American has a series of gathering and storage infrastructure operations throughout the greater Permian play. Last year, the company entered into a joint-venture agreement with a refiner that has a facility Memphis, Tennessee on a 440-mile pipeline that runs from Cushing to Memphis. The pipeline capacity for the Diamond pipeline, expected to be in service by the end of the year, tops out at 350 mb/d.
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