April 12, 2019 / 5:55 PM / 10 days ago

U.S. FERC approves EPIC oil pipeline rates, interim service to begin mid-2019

NEW YORK (Reuters) - U.S. energy regulators on Thursday approved the rate structure and terms of service for EPIC Crude Pipeline LP’s new 900,000 barrels per day (bpd) line from the Permian basin to Corpus Christi, Texas, subject to some conditions.

EPIC plans to provide interim service by mid-2019 and place the line into service during the fourth quarter, according to a filing with the Federal Energy Regulatory Commission (FERC).

FERC granted EPIC’s proposal to provide interim service.

The line will be constructed and placed into service in two phases, including an interim one in which it will lease capacity from an adjacent natural gas liquids (NGL) pipeline, and a secondary mainline construction phase. The interim service will transport crude from Crane, Texas and possibly other points in Texas, to existing terminals in Corpus Christi.

Two segments of the NGL system have been placed into service and the third segment is scheduled to be completed between April and June, the filing said.

Company spokesman Bruce Kates said on Wednesday interim service from Crane to Corpus Christi is expected to begin during the third quarter and that the line was expected to be in permanent service beginning January 2020.

Kates did not immediately respond to a request for comment on Friday.

In January, EPIC sent a letter to FERC saying the projected third-quarter start-up of its crude pipeline was in “some jeopardy” after regulators delayed action on its petition to set initial tariff rates.

The planned EPIC pipeline, stretching from Southeast New Mexico and West Texas to refineries and other destinations in and around Corpus Christi is one of the largest lines currently under construction, and is seen as vital for bringing crude out of the largest oilpatch in the United States.

Regional oil prices in the Permian basin have come under pressure this month as production has continued to climb to fresh peaks and inventories edge higher, market participants said. [CRU/C]

Last year, prices sank to near four-year lows after production outpaced existing pipeline takeaway capacity.

Reporting by Devika Krishna Kumar in New York; Editing by Marguerita Choy

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