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UPDATE 1-Sunoco to move ahead with phase I of Permian Basin line
August 21, 2012 / 3:02 PM / 5 years ago

UPDATE 1-Sunoco to move ahead with phase I of Permian Basin line

* Sunoco says Phase I will be online by Q1 2013

* Sunoco says will keep open season until Sept. 6

By Janet McGurty

NEW YORK, Aug 21 (Reuters) - Sunoco Logistics Partners L.P. said on Tuesday it had enough binding shipper commitments to move forward with its pipeline to carry crude oil from the west Texas Permian Basin to the Gulf Coast, home to the United States’ largest concentration of oil refineries.

The company said that it has enough shippers for the Permian Express Phase I to enable the 90,000 barrel per day pipeline to come online in the first quarter of 2013.

Despite sufficient shipping commitments, the company will keep the open shipping season until Sept. 6.

The line will run from Oklahoma-border town of Wichita Falls, Texas, southeast to Sunoco’s Nederland Terminal straddling the Texas-Louisiana border on the Gulf Coast.

Sunoco’s Nederland terminal, located on the Sabine-Neches waterway between Beaumont and Port Arthur, Texas, has over 22 million barrels of crude and petroleum products and feedstocks storage capacity with connections to several pipelines as well as water access.

The Permian Basin is a mature oil producing area in West Texas and eastern New Mexico which has found new life with the improvement in drilling technology, including horizontal drilling and hydraulic fracturing.

Energy consultant Bentek expects production in the region to rise by 60 percent to reach at least 1.82 million bpd in 2016. Although proposed pipelines expansions add up to 1 million bpd, Bentek expects takeaway capacity to exceed pipeline capacity.

The Permian Express Phase I will use existing line owned or leased by Sunoco Pipeline LP. Phase II of the system will increase the flow to 150,000 bpd in the third or fourth quarter of 2013.

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