* Permian Express Phase I coming; Phase II in development
* Nederland access part of other Texas crude line delayed
* Company proposes reversed, converted Eaglebine crude line
By Kristen Hays
HOUSTON, May 9 Sunoco Logistics Partners LP
expects the first phase of its West Texas-Nederland
Permian Express crude oil pipeline to be operational at its
initial 90,000 barrel per day capacity in June, Chief Executive
Mike Hennigan told analysts on Thursday.
He said the second phase, which would carry an additional
200,000 bpd, is in the development and marketing phase, as
output from the West Texas basin is expected to keep growing.
"My number is 200,000 barrels a day per year," Hennigan said
of his Permian output growth projection. "If you believe that
type of number, you need this type of project occurring every
year to keep up with 200,000 barrels a year of growth."
Sunoco's storage hub in Nederland can hold 22 million
barrels of crude.
Permian Basin output is booming as technological advances
allow producers to tap oil in tight sands and shale plays such
as the Eagle Ford in south Texas and North Dakota's Bakken.
Sunoco's projects are among a number in the works to move that
cheap U.S. crude to markets.
Hennigan, speaking during the company's first-quarter
earnings conference call, said another major project, a 110,000
bpd West Texas-to-Nederland crude line, is coming online in
The 40,000 bpd Houston access project started up, and a
30,000 bpd line to carry crude from West Texas to the Mid-Valley
pipeline in Longview, Texas, will be operational by the end of
May, he said.
However, a 40,000 bpd Nederland access part of that project
is connected to Exxon Mobil Corp's Pegasus crude oil
pipeline that was shut in March when it ruptured and spilled
5,000 barrels of heavy Canadian crude into an Arkansas housing
subdivision. The startup of Sunoco's project has been delayed
until the Pegasus line restarts, Hennigan said.
"We don't have information to share on the restart timing
and we are awaiting information from Exxon Mobil," he said.
Sunoco also plans to reverse an underused refined products
pipeline to move crude oil to Nederland and could launch an open
season to gauge shipper interest as early as next week, Hennigan
said. The reversed and converted line could be in service by
The Eaglebine Express originates in Hearne, Texas, about 200
miles northwest of Nederland. Hennigan said the Eagle Ford shale
extends to the Woodbine play, hence the name.
"We view it as a sweet spot where the areas are meeting, so
that is a nice fit for an area of crude production," he said.