* Expansion to add storage, pipelines to connect to
* Project will boost refiner access to cheaper U.S.,
By Kristen Hays
HOUSTON, May 2 Enterprise Products Partners
will expand its crude oil storage and distribution
system serving Southeast Texas refineries, the pipeline and
distribution company said on Thursday.
The expansion includes an additional 4 million barrels of
crude oil storage capacity at its Enterprise Crude Houston Oil
(ECHO) terminal on the Houston Ship Channel, as well as about 55
miles of 24-inch and 36-inch pipeline to connect the terminal
with major refineries in the southeast Texas market.
Refineries in that area include Motiva Enterprises'
600,000 barrels-per-day (bpd) refinery in Port
Arthur; Exxon Mobil Corp's 560,500 bpd Baytown and
344,500 bpd Beaumont plants; Marathon Petroleum Corp's
451,000 bpd Galveston Bay refinery; and Valero Energy Corp's
290,000 bpd Port Arthur and 225,000 bpd Texas City
Exchange operator CME group Inc has said it would
consider launching a new Gulf Coast crude futures contract after
its West Texas Intermediate contract - the benchmark for U.S.
crude - drew criticism for reflecting market conditions
surrounding the landlocked Cushing, Oklahoma, delivery point.
Stocks at Cushing fell by 1.38 million barrels to 49.8
million barrels last week, but inventories in the Gulf Coast
region soared by 7.7 million barrels, the largest weekly
increase there since July 2010, according to the U.S. Energy
The expansion, which will push the ECHO terminal's storage
capacity past 6 million barrels, will be finished in phases,
with the final phase done in the fourth quarter of 2014, the
The ECHO terminal also will have access to Enterprise'
marine terminal at Morgan's Point on the Houston Ship Channel.
Enterprise did not disclose the cost of the project.
The expansion comes amid booming U.S. and Canadian crude
production that increasingly is replacing more expensive
waterborne imports that traditionally supplied southeast Texas
refineries, Enterprise said.
As production increasingly flows into that market from the
Eagle Ford shale and Permian Basin in Texas, North Dakota's
Bakken shale, other midcontinent shale plays and Canada, "there
will be a significant increase in crude oil bound for the Gulf
Coast," the company said. Those crudes arrive via rail, barge
and pipeline, with more pipeline projects coming online.
Jim Teague, chief operating officer for Enterprise, said the
company had received "strong interest" from customers to
expedite development of more storage capacity and distribution
capability as refiners increasingly tap those crudes, which are
more profitable because of their discounts to global crudes
priced off London's Brent.
Other companies also have increased storage and distribution
capacity along the U.S. Gulf Coast to accommodate that incoming
supply, including Kinder Morgan Energy Partners, Plains
All American and Sunoco Logistics Partners