* Sunoco plans third West Texas crude pipeline
* New line to carry West Texas crude to the Gulf Coast
By Janet McGurty
NEW YORK, April 11 Sunoco Logistics
on Wednesday announced open season for crude oil shippers to
lock in space on its a new pipeline designed to carry West Texas
to its storage terminal on the Gulf Coast, helping to alleviate
the glut of crude in the region.
The line will initially be able to carry up to 40,000
barrels per day of West Texas Sour from fields in the
western part of the state to Sunoco's crude terminal in
Nederland, Texas, just east of Houston. It is planned to come
online in the first quarter of 2013.
The once-dwindling output from the traditional producing
fields of the Permian Basin in West Texas has been revived by
new technologies used to drill in tight oil sands like Eagle
Ford in Texas and the Bakken in North Dakota.
Transportation to carry both West Texas Sour and West Texas
Intermediate out of the regional oil hub of Midland has been
lagging output, pushing down the price of regional crudes to
almost $10.00 a barrel under the U.S. crude benchmark, West
This is the third line Sunoco has in the works to alleviate
the West Texas crude glut. Its 40,000 bpd line carrying crude
from West Texas to Houston began earlier this month.
Sunoco is also planning a 30,000 bpd line to carry crude
from West Texas to the Mid-Valley pipeline in Longview, Texas in
the northeastern part of the state. It is expected to be
operational in January 2013.
Growing Canadian and North Dakota production flowing
eastward and southward has created a glut of crude in the
Midwest, depressing WTI-based U.S. crudes compared to crudes
priced against the world market benchmark, Brent.
Refiners in the largest U.S. refining complex on the Gulf
Coast have been paying steep world prices for crude, keeping
U.S. fuel prices high, while refiners in the Midwest have been
paying low WTI-based prices, selling at higher national average
prices, and making huge profits.
That spread, and the mid-continent advantage enjoyed by that
regions refiners, is expected to shrink with reversal of
pipelines such as Seaway.
Partners Enterprise Products and Enbridge Inc
expect to start operation on Seaway later this quarter.
Also in the works are new lines, such as the TransCanada
Corp's planned Keystone Cushing-to-Gulf Coast link.
Open season for Sunoco's West Texas to Nederland line begins
on April 11, 2012 and will end on May 11,2012.