A new Texas oil pipeline started shipping condensates from Eagle Ford in May 2013. The new pipeline is owned by Double Eagle Pipeline LLC, a 50-50 joint venture between Magellan Midstream Partners and Kinder Morgan Energy Partners (KMEP). The condensates are coming from Karnes County and Live Oak County in Texas and are being transported via KMEP’s already existing 50 mile pipeline from Three Rivers, where Double Eagle’s new unloading and storage facility is also in operation, and from there to Magellan’s Corpus Christi terminal
Construction is expected to be completed on the new Double Eagle 140 mile long western leg of the pipeline, from Gardendale in LaSalle County to Three Rivers, within the next few months. The expected capacity is 100,000 b/d with a possible maximum of 150,000 with additional pumps. The project costs $150 million, to be shared equally between KMEP and Magellan. Magellan Chairman and Chief Executive Officer Mike Mears said that shipper interest in the Double Eagle pipeline has increased as completion on the new pipeline gets closer. In preparation for these expansions, Magellan improved the terminal at Corpus Christi, including construction of new 50,000 barrel condensate storage and a new dock delivery pipeline.
This is just the latest news in pipeline construction and expansion in Texas, particularly in this oil rich area of southern Texas. Last month, Plains All American Pipeline LP announced it is building a 310 mile Cactus Pipeline from McCarney in Upton County to Gardendale. The estimated cost will be $350-$375 million. The Cactus Pipeline is expected to be functional in 2015 and will have a capacity of 220,000 b/d of sweet and sour crude oil from the Permian Basin. It will connect with the Plains All American-Enterprise Products Partners Eagle Ford Joint Venture Pipeline, which serves Three Rivers and Corpus Christi as well as the Houston area through the Enterprise South Texas Crude Oil Pipeline. This will displace foreign imports of sour crude oil into the Gulf.
Finally, KMEP announced in April 2013 that, in addition to the Texas pipeline expansion noted above, the company will construct another pipeline, called the Kinder Morgan Freedom Pipeline, from the Permian Basin, in Wink and Midland, Texas, to Emidio and Pentland, California, with a capacity of 270,000 b/d. It is planned to be 1,025 miles long, with 740 miles of converted pipeline from the El Paso Natural Gas Co line, plus 22 miles of new pipeline connections in California and 200 miles between Wink and El Paso, Texas. Work on this new pipeline is expected to commence in June 2015, with an anticipated service date of the end of 2016.
All of this pipeline construction is exciting news for the growing and healthy oil and gas industry in Texas. It will bring more jobs and prosperity to our state, but with all of this pipeline growth, it is important for Texas landowners to remember to consult an experienced oil and gas pipeline attorney before agreeing to a pipeline easement. Please review our prior article here on why this is so important.
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