Phillips 66 forms pipeline JVs with Plains All American, Bridger Pipeline
Houston, Texas-headquartered Phillips 66 has formed two separate 50/50 joint ventures (JVs) with Plains All American Pipeline and Bridger Pipeline.
The two JVs will be known as Red Oak Pipeline and Liberty Pipeline, respectively.
Red Oak Pipeline
Under the 50/50 JV, Phillips 66 is proceeding with construction of the Red Oak Pipeline system, which will provide crude oil transportation service from Cushing, Oklahoma and the Permian Basin in West Texas, to Corpus Christi, Ingleside, Houston and Beaumont, Texas.
Initial service from Cushing to the Gulf Coast is expected to begin as early as Q1 2021, subject to receipt of permits and regulatory approvals.
“We are pleased to partner with Plains to build Red Oak,” said Greg Garland, Phillips 66 chairman and CEO. “The pipeline provides a competitive outlet for shippers to access the key market centres along the Texas Gulf Coast from Cushing and the Permian. This investment aligns with our long-term strategy to grow our Midstream business with projects generating stable, fee-based earnings while further enhancing integration across our value chain.”
“Red Oak represents a capital-efficient industry solution that will utilise existing assets and provide pull-through benefits to our systems,” added Willie Chiang, CEO of Plains All American. “We look forward to working closely with Phillips 66 and our committed shippers to bring Red Oak into service and further optimise our assets upstream and downstream of the new pipeline system. We also look forward to creating jobs and supporting economic growth in Oklahoma and Texas.”
The JV intends to build a new 30-inch pipeline from Cushing to Wichita Falls and Sealy, Texas. From Sealy, the JV will construct a 30-inch pipeline segment to Corpus Christi and Ingleside, as well as a 20-inch pipeline segment to Houston and Beaumont.
Where possible, Red Oak will use existing pipeline and utility corridors and advanced construction techniques to limit the impact on the environment and local communities.
Plains will lead project construction on behalf of the JV with Phillips 66 operating the pipeline. The project is expected to cost around $2.5 billion (€2.2 billion).
Liberty Pipeline
The Liberty Pipeline JV is proceeding with construction of the Liberty Pipeline, a 24-inch pipeline that will provide crude oil transportation service from the Rockies and Bakken production areas to Cushing, Oklahoma.
Initial service is expected to begin as early as Q1 2012, subject to receipt of permits and regulatory approvals. The project is expected to cost around $1.6 billion (€1.4 billion).
“The Liberty Pipeline presents us with a great opportunity to serve producers in the growing Bakken and Rockies production areas,” said Garland. “The pipeline adds to our integrated infrastructure network that serves the key shale oil producing regions with connectivity to major Gulf Coast market centres. Our pipeline network has strategic alignment with our Central Corridor and Gulf Coast refineries, further enhancing value across our assets.”
“The Liberty Pipeline is an important undertaking on the part of our company to ensure that oil from Wyoming, the Rockies and the Bakken can get to markets in the US and around the world,” added Hank True, president of Bridger Pipeline. “Our commitment to the Liberty Pipeline will give producers confidence to grow oil production in these important regions.”
Phillips 66 will lead project construction and operate the pipeline. Where possible, Liberty will also use existing pipeline and utility corridors, and will use techniques to limit the impact on the local environment and communities.
