In small steps and giant leaps, Enbridge has been building out two “supersystems” for transporting crude oil to refineries and the company’s own export terminals along Texas’s Gulf Coast, one moving heavy crude all the way from Alberta’s oil sands to the Houston area and the other shuttling light oil from the Permian to Enbridge’s massive terminal in Ingleside on the north side of Corpus Christi Bay. There’s nothing quite like it — first, an unbroken series of pipelines from Western Canada to Enbridge’s tank farm in Cushing, OK, (via the Midwest) and from there to Freeport, TX, on the twin Seaway pipelines; and second, the Gray Oak and Cactus II pipes from West Texas to the U.S.’s #1 crude export terminal. And the midstream giant is far from done. New projects and expansions are in the works, as we discuss in today’s RBN blog.
We’ll begin with a few relevant facts. First, the U.S. produces far more light crude oil than its refineries can economically process — the same is true for Canada regarding heavy crude. Second, crude supply that is surplus to domestic demand needs to be exported — for the U.S. that means loading oil onto tankers, and for Canada it largely means piping crude south to the U.S., with some of those volumes sent to refineries in the Midwest/Great Plains and most of the rest headed for the Gulf Coast, either for use by refineries there or for “re-export.” And third, the Permian and the Alberta oil sands are by far the leading production areas — and the fastest-growing — in the U.S. and Canada, respectively, and given the Permian’s relative proximity to Gulf Coast ports (not to mention the demand for its light crude in some overseas markets) it’s only logical that a good bit of West Texas’s output is shipped overseas.
All that helps to explain why Enbridge, one of North America’s largest midstream companies, has been focusing so much of its attention — and capital — on facilitating the transport of increasing volumes of crude oil from Western Canada and the Permian to Texas’s Gulf Coast and the loading of significant shares of that crude onto ships. Next, we’ll look at Enbridge’s existing crude oil pipeline, storage, and export assets, particularly those relating to the delivery of Western Canadian and Permian crude to Texas’s Gulf Coast, as well as what the company is planning to make its two oil supersystems even bigger and more efficient.
Enbridge is best-known in crude oil circles for its too-big-for-words, 3.2-MMb/d Mainline system, which includes myriad pipelines — Lines 1, 2, 3, 4, 5, 6, 7, 11, 14, 61, 62, 64, 65, 67, 78, and 93 (did we forget any?) — that run from Edmonton, AB, to Superior, WI, and from there to a number of important terminals, including the company’s 5-MMbbl Flanagan terminal in Pontiac, IL. From there, crude can either flow south on Enbridge’s Southern Access Extension pipeline (lavender line in Figure 1) to the Patoka storage and distribution hub (yellow star in southern Illinois) or southwest on either the company’s 193-Mb/d Spearhead Pipeline (magenta line) or 660-Mb/d Flanagan South Pipeline (light-blue line) to the much larger hub in Cushing (yellow star in Oklahoma). Enbridge now has 26 MMbbl of storage capacity at Cushing (having boosted its position there in March 2021 through the acquisition of Blueknight Energy Partners’ 6.6 MMbbl of tankage there), putting it almost on par with Cushing’s biggest player, Plains All American, with 27 MMbbl of capacity at the hub.
Figure 1. Enbridge’s Crude Oil Supersystems. Source: RBN
From Cushing, crude oil can flow south on Enbridge and Enterprise Products Partners’ jointly owned Seaway Pipeline system (orange line), which consists of twin 500-mile, 30-inch-diameter pipelines with a combined capacity of up to 950 Mb/d — the system’s throughput depends on the type (i.e., the viscosity) of crude. The long-haul pipes run to Seaway’s Jones Creek terminal (lower yellow star in inset map), which is connected to Seaway’s Freeport and Texas City marine terminals as well as Enterprise’s ECHO terminal in Houston (upper yellow star in inset map), where Seaway owns three tanks. (More on Jones Creek in a moment.) The Freeport and Texas City terminals to date have been exporting modest volumes of crude, averaging only 86 Mb/d and 21 Mb/d, respectively, in 2022 — far behind the Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel, which is connected to the ECHO terminal and which sent out 375 Mb/d of crude last year, according to RBN’s weekly Crude Voyager report.
Enbridge announced earlier this month that it will hold an open season later in March for up to 95 Mb/d of incremental capacity on the eight-year-old Flanagan South Pipeline (from Pontiac to Cushing) and that it has decided to proceed with the construction of the Enbridge Houston Oil Terminal (EHOT; yellow-and-gray-striped star in inset map) adjacent to Seaway’s Jones Creek terminal. More specifically, Enbridge said that an initial $240 million investment at EHOT will create 2.5 MMbbl of storage there, and that the terminal could eventually accommodate up to 15 MMbbl of tankage. (The capacity built at EHOT will be underpinned by long-term take-or-pay contracts.) Like the Jones Creek terminal next door, EHOT will be connected by pipe to area refineries and to Seaway’s Freeport and Texas City terminals.
More important, perhaps, the new terminal could serve as a primary staging point for piped deliveries to the Sea Port Oil Terminal (SPOT; red-and-gray-striped diamond), a deepwater crude oil export terminal off the coast of Freeport being jointly developed by Enterprise and Enbridge. As we said in Houston Bound a couple of weeks ago, SPOT — which its co-developers hope to have up and running in a few years — would have a huge competitive advantage: the ability to fully load Very Large Crude Carriers (VLCCs) with no reverse lightering and none of the vessel traffic jams that regularly limit loading from many onshore terminals. With two single-point mooring buoys capable of loading oil a total of up to 85 Mbbl per hour (Mb/h), SPOT could, in theory, send out up to one fully laden, 2-MMbbl VLCC per day.
That’s Enbridge’s heavy oil supersystem. The company’s Permian light oil supersystem has fewer moving parts — three pipelines (two long-haul and one short), a small inland terminal at Taft and a gargantuan marine terminal in Ingleside — but it’s every bit as impressive and is poised to undergo expansions of its own. We’ll start with the Enbridge Ingleside Energy Center (EIEC; yellow star near Corpus Christi), the 925-acre marine terminal that the company acquired from Moda Midstream in October 2021 as part of a $3 billion deal. As anyone who follows crude oil exports knows, EIEC (yellow star near Corpus Christi) is by far the U.S.’s largest export point for crude oil, sending out 742 Mb/d last year and 847 Mb/d in the first 10 weeks of 2023, again according to Crude Voyager. In addition to its direct connection to a number of major pipelines (see You Send Me for details), the terminal has 15.6 MMbbl of existing storage capacity and is building another ~2 MMbbl of tankage (four 490-Mbbl tanks) that will be operational by late 2023 or early 2024. The kickers, of course, are the 52-foot draft alongside EIEC’s docks, the resulting ability to load up to 1.6 MMbbl onto a VLCC, and the potential to load two VLCCs and one Suezmax tanker at the same time. (The terminal can load at a pace of up to 160 Mb/h.) EIEC will be able to fully load VLCCs if and when the ship channel is deepened further.
Enbridge Ingleside Energy Center. Source: Enbridge
As we said recently in Sooner or Later, the primary impediment to further growth in exports out of EIEC (and other Corpus-area terminals like South Texas Gateway) is the fact that Permian-to-Corpus pipelines are nearing capacity, which (along with a few other factors) may result in more Permian volumes heading for Houston. Enbridge is on that case, too. Over the past couple of years, the company has been increasing its ownership interest in the 670-Mb/d Cactus II pipeline (dark-blue line in Figure 1) to 30% and the 950-Mb/d Gray Oak Pipeline (green line) to 68.5%, and it announced earlier this month that it is pursuing a possible 200-Mb/d expansion of Gray Oak and that it’s likely the project will be sanctioned later this year. An expanded Gray Oak would allow Enbridge to further increase export volumes out of EIEC.
Enbridge’s plans (and others) will be among the topics we will be discussing at xPortCon-Oil 2023, our upcoming conference on crude oil and petroleum product exports. At the one-day event — scheduled for the Houstonian in Houston on June 8, 2023 — we will be bringing together the views of top executives engaged in these markets — midstreamers, private equity, producers, shipping companies, and other major players — along with RBN’s latest analysis on infrastructure, production and takeaway capacity.
In addition to the whole RBN senior analyst team, we’ll be joined by Jim Teague, co-CEO of Enterprise; Scott Sheffield, CEO of Pioneer Natural Resources; Aaron Milford, CEO of Magellan Midstream; Brian Freed, CEO of EPIC Midstream; Tom Kloza, Global Head of Energy Analysis at OPIS; Tony Chovanec, Senior Vice President of Fundamentals and Supply Appraisal at Enterprise; and Sean Strawbridge, CEO of Port of Corpus Christi. Other folks participating in our conference will be announced over the next few days.
Sign up now at our Early Bird rate!
“From Here to There to You” was written by Pete McKinlay and appears as the second song on side two of Hank Locklin’s fifth studio album, Hank Locklin. Released as a single in April 1961, it went to #12 on the Billboard Hot Country Songs Singles chart. The song was recorded at RCA Victor Studios in Nashville in early 1960 during the same sessions that produced Locklin’s #1 country hit, “Please Help Me, I’m Falling.” Personnel on the record were: Hank Locklin (lead vocals), Chet Atkins (guitars), Floyd Cramer (piano), Bob Moore (bass), and The Jordanaires, Anita Kerr Singers (background vocals).
The album Hank Locklin was compiled from songs Locklin recorded for RCA from 1955 to 1960. None of the material had been issued on an album previously. The songs recorded in 1955-56 were produced by Steve Sholes, with Chet Atkins producing the ones recorded after that. The tracks were backed by many A-list Nashville session musicians from the era. The album was released by RCA/Camden in March 1962. Five singles were included on the LP, with “From Here to There to You” being the only one with chart success.
Hank Locklin (Lawrence Hankins L
From Here To There To You - Enbridge's Heavy- And Light-Oil 'Supersystems' To Texas's Gulf Coast
In small steps and giant leaps, Enbridge has been building out two “supersystems” for transporting crude oil to refineries and the company’s own export terminals along Texas’s Gulf Coast, one moving heavy crude all the way from Alberta’s oil sands to the Houston area and the other shuttling light oil from the Permian to Enbridge’s massive terminal in Ingleside on the north side of Corpus Christi Bay. There’s nothing quite like it — first, an unbroken series of pipelines from Western Canada to Enbridge’s tank farm in Cushing, OK, (via the Midwest) and from there to Freeport, TX, on the twin Seaway pipelines; and second, the Gray Oak and Cactus II pipes from West Texas to the U.S.’s #1 crude export terminal. And the midstream giant is far from done. New projects and expansions are in the works, as we discuss in today’s RBN blog.
We’ll begin with a few relevant facts. First, the U.S. produces far more light crude oil than its refineries can economically process — the same is true for Canada regarding heavy crude. Second, crude supply that is surplus to domestic demand needs to be exported — for the U.S. that means loading oil onto tankers, and for Canada it largely means piping crude south to the U.S., with some of those volumes sent to refineries in the Midwest/Great Plains and most of the rest headed for the Gulf Coast, either for use by refineries there or for “re-export.” And third, the Permian and the Alberta oil sands are by far the leading production areas — and the fastest-growing — in the U.S. and Canada, respectively, and given the Permian’s relative proximity to Gulf Coast ports (not to mention the demand for its light crude in some overseas markets) it’s only logical that a good bit of West Texas’s output is shipped overseas.
All that helps to explain why Enbridge, one of North America’s largest midstream companies, has been focusing so much of its attention — and capital — on facilitating the transport of increasing volumes of crude oil from Western Canada and the Permian to Texas’s Gulf Coast and the loading of significant shares of that crude onto ships. Next, we’ll look at Enbridge’s existing crude oil pipeline, storage, and export assets, particularly those relating to the delivery of Western Canadian and Permian crude to Texas’s Gulf Coast, as well as what the company is planning to make its two oil supersystems even bigger and more efficient.
Enbridge is best-known in crude oil circles for its too-big-for-words, 3.2-MMb/d Mainline system, which includes myriad pipelines — Lines 1, 2, 3, 4, 5, 6, 7, 11, 14, 61, 62, 64, 65, 67, 78, and 93 (did we forget any?) — that run from Edmonton, AB, to Superior, WI, and from there to a number of important terminals, including the company’s 5-MMbbl Flanagan terminal in Pontiac, IL. From there, crude can either flow south on Enbridge’s Southern Access Extension pipeline (lavender line in Figure 1) to the Patoka storage and distribution hub (yellow star in southern Illinois) or southwest on either the company’s 193-Mb/d Spearhead Pipeline (magenta line) or 660-Mb/d Flanagan South Pipeline (light-blue line) to the much larger hub in Cushing (yellow star in Oklahoma). Enbridge now has 26 MMbbl of storage capacity at Cushing (having boosted its position there in March 2021 through the acquisition of Blueknight Energy Partners’ 6.6 MMbbl of tankage there), putting it almost on par with Cushing’s biggest player, Plains All American, with 27 MMbbl of capacity at the hub.
Figure 1. Enbridge’s Crude Oil Supersystems. Source: RBN
From Cushing, crude oil can flow south on Enbridge and Enterprise Products Partners’ jointly owned Seaway Pipeline system (orange line), which consists of twin 500-mile, 30-inch-diameter pipelines with a combined capacity of up to 950 Mb/d — the system’s throughput depends on the type (i.e., the viscosity) of crude. The long-haul pipes run to Seaway’s Jones Creek terminal (lower yellow star in inset map), which is connected to Seaway’s Freeport and Texas City marine terminals as well as Enterprise’s ECHO terminal in Houston (upper yellow star in inset map), where Seaway owns three tanks. (More on Jones Creek in a moment.) The Freeport and Texas City terminals to date have been exporting modest volumes of crude, averaging only 86 Mb/d and 21 Mb/d, respectively, in 2022 — far behind the Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel, which is connected to the ECHO terminal and which sent out 375 Mb/d of crude last year, according to RBN’s weekly Crude Voyager report.
Enbridge announced earlier this month that it will hold an open season later in March for up to 95 Mb/d of incremental capacity on the eight-year-old Flanagan South Pipeline (from Pontiac to Cushing) and that it has decided to proceed with the construction of the Enbridge Houston Oil Terminal (EHOT; yellow-and-gray-striped star in inset map) adjacent to Seaway’s Jones Creek terminal. More specifically, Enbridge said that an initial $240 million investment at EHOT will create 2.5 MMbbl of storage there, and that the terminal could eventually accommodate up to 15 MMbbl of tankage. (The capacity built at EHOT will be underpinned by long-term take-or-pay contracts.) Like the Jones Creek terminal next door, EHOT will be connected by pipe to area refineries and to Seaway’s Freeport and Texas City terminals.
More important, perhaps, the new terminal could serve as a primary staging point for piped deliveries to the Sea Port Oil Terminal (SPOT; red-and-gray-striped diamond), a deepwater crude oil export terminal off the coast of Freeport being jointly developed by Enterprise and Enbridge. As we said in Houston Bound a couple of weeks ago, SPOT — which its co-developers hope to have up and running in a few years — would have a huge competitive advantage: the ability to fully load Very Large Crude Carriers (VLCCs) with no reverse lightering and none of the vessel traffic jams that regularly limit loading from many onshore terminals. With two single-point mooring buoys capable of loading oil a total of up to 85 Mbbl per hour (Mb/h), SPOT could, in theory, send out up to one fully laden, 2-MMbbl VLCC per day.
That’s Enbridge’s heavy oil supersystem. The company’s Permian light oil supersystem has fewer moving parts — three pipelines (two long-haul and one short), a small inland terminal at Taft and a gargantuan marine terminal in Ingleside — but it’s every bit as impressive and is poised to undergo expansions of its own. We’ll start with the Enbridge Ingleside Energy Center (EIEC; yellow star near Corpus Christi), the 925-acre marine terminal that the company acquired from Moda Midstream in October 2021 as part of a $3 billion deal. As anyone who follows crude oil exports knows, EIEC (yellow star near Corpus Christi) is by far the U.S.’s largest export point for crude oil, sending out 742 Mb/d last year and 847 Mb/d in the first 10 weeks of 2023, again according to Crude Voyager. In addition to its direct connection to a number of major pipelines (see You Send Me for details), the terminal has 15.6 MMbbl of existing storage capacity and is building another ~2 MMbbl of tankage (four 490-Mbbl tanks) that will be operational by late 2023 or early 2024. The kickers, of course, are the 52-foot draft alongside EIEC’s docks, the resulting ability to load up to 1.6 MMbbl onto a VLCC, and the potential to load two VLCCs and one Suezmax tanker at the same time. (The terminal can load at a pace of up to 160 Mb/h.) EIEC will be able to fully load VLCCs if and when the ship channel is deepened further.
Enbridge Ingleside Energy Center. Source: Enbridge
As we said recently in Sooner or Later, the primary impediment to further growth in exports out of EIEC (and other Corpus-area terminals like South Texas Gateway) is the fact that Permian-to-Corpus pipelines are nearing capacity, which (along with a few other factors) may result in more Permian volumes heading for Houston. Enbridge is on that case, too. Over the past couple of years, the company has been increasing its ownership interest in the 670-Mb/d Cactus II pipeline (dark-blue line in Figure 1) to 30% and the 950-Mb/d Gray Oak Pipeline (green line) to 68.5%, and it announced earlier this month that it is pursuing a possible 200-Mb/d expansion of Gray Oak and that it’s likely the project will be sanctioned later this year. An expanded Gray Oak would allow Enbridge to further increase export volumes out of EIEC.
Enbridge’s plans (and others) will be among the topics we will be discussing at xPortCon-Oil 2023, our upcoming conference on crude oil and petroleum product exports. At the one-day event — scheduled for the Houstonian in Houston on June 8, 2023 — we will be bringing together the views of top executives engaged in these markets — midstreamers, private equity, producers, shipping companies, and other major players — along with RBN’s latest analysis on infrastructure, production and takeaway capacity.
In addition to the whole RBN senior analyst team, we’ll be joined by Jim Teague, co-CEO of Enterprise; Scott Sheffield, CEO of Pioneer Natural Resources; Aaron Milford, CEO of Magellan Midstream; Brian Freed, CEO of EPIC Midstream; Tom Kloza, Global Head of Energy Analysis at OPIS; Tony Chovanec, Senior Vice President of Fundamentals and Supply Appraisal at Enterprise; and Sean Strawbridge, CEO of Port of Corpus Christi. Other folks participating in our conference will be announced over the next few days.
Sign up now at our Early Bird rate!
“From Here to There to You” was written by Pete McKinlay and appears as the second song on side two of Hank Locklin’s fifth studio album, Hank Locklin. Released as a single in April 1961, it went to #12 on the Billboard Hot Country Songs Singles chart. The song was recorded at RCA Victor Studios in Nashville in early 1960 during the same sessions that produced Locklin’s #1 country hit, “Please Help Me, I’m Falling.” Personnel on the record were: Hank Locklin (lead vocals), Chet Atkins (guitars), Floyd Cramer (piano), Bob Moore (bass), and The Jordanaires, Anita Kerr Singers (background vocals).
The album Hank Locklin was compiled from songs Locklin recorded for RCA from 1955 to 1960. None of the material had been issued on an album previously. The songs recorded in 1955-56 were produced by Steve Sholes, with Chet Atkins producing the ones recorded after that. The tracks were backed by many A-list Nashville session musicians from the era. The album was released by RCA/Camden in March 1962. Five singles were included on the LP, with “From Here to There to You” being the only one with chart success.
Hank Locklin (Lawrence Hankins Locklin) was an American country music singer and songwriter. The Florida-born and -bred performer had 70 charting country singles, including the #1 hits: “Please Help Me, I'm Falling” and “Send Me the Pillow You Dream On.” He released 29 studio albums, 10 compilation albums and 96 singles, was inducted into the Grand Ole Opry in 1960, and is a member of the Florida Artists Hall of Fame. A number of fellow country music artists have spoken of Locklin’s influence on their careers, including Dwight Yoakam and Dolly Parton. Locklin died at his home in Brenton, FL, in March 2009 at the age of 91.ocklin) was an American country music singer and songwriter. The Florida-born and -bred performer had 70 charting country singles, including the #1 hits: “Please Help Me, I'm Falling” and “Send Me the Pillow You Dream On.” He released 29 studio albums, 10 compilation albums and 96 singles, was inducted into the Grand Ole Opry in 1960, and is a member of the Florida Artists Hall of Fame. A number of fellow country music artists have spoken of Locklin’s influence on their careers, including Dwight Yoakam and Dolly Parton. Locklin died at his home in Brenton, FL, in March 2009 at the age of 91.
