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Crude oil pipelines in North America: a current perspective07/06/2022
Being the main means of transferring crude oil around the world, pipelines rapidly convey oil and its derivative products (gasoline, jet fuel, diesel fuel, heating oil, and heavier fuel oils) to refineries and empower other businesses.
The U.S. and Canada solely make North America a major oil hub for more than 90,000 miles of crude oil and petroleum product pipelines, which are connected to more than 140 refineries daily processing about 20 million barrels of oil.
All data provided in this article are based on Rextag's application to demonstrate crude oil pipelines and refineries across the U.S. and Canada.
Compared to 2010, U.S. crude oil production has increased more than twice: from 5.4 to 11.5 million barrels a day. Therefore, newly produced oil obliged energy companies to expand their pipeline networks, but it has only increased by 56%. According to the latest data, Plains manages the largest pipeline network across the U.S. and Canada (its diameter is at least 10 inches) which is the 14,919-mile network that spans from the northwestern tip of Alberta down to the southern coasts of Texas and Louisiana.
Other companies with the largest length of pipeline networks are Enbridge Energy Partners LP (12,974 miles), which transports about 30% of the crude oil produced in North America., then Sunoco Inc. (6,409 miles), MPLX LP (5,913 miles), and Lotus Midstream (5,767 miles).
The place where all these various spreading pipeline networks carry crude oil is refineries, where it is transformed into different petroleum products. Gulf Coast (PADD 3) possesses several refineries with the largest throughput in North America that process more than 500,000 barrels per day. They are located in the states of Louisiana and Texas: Motiva Enterprises (607,000 bpd), Marathon Petroleum in Galveston Bay (585,000 bpd), Marathon Petroleum in Garyville (578,00 bpd), ExxonMobil in Baytown and Baton Rouge (560,000 and 518,000 respectively).
It is important to admit that Texas and Louisiana have six refineries that process more than 400,000 barrels per day, nevertheless, there are only two facilities outside of these states with the same throughput: Whiting, Indiana (435,000 bpd) and Fort McMurray, Alberta (465,000 bpd).
However, Fort McMurray’s facility is an upgrader, which upgrades heavy oils like bitumen into lighter synthetic crude oil which flows through pipelines more easily, that is why it differs, as lots of oil refineries are not able to directly convert bitumen, consequently it makes upgraders an obligatory part in the production and processing of crude oil from oil sands.
Not only does the development of new pipelines give a plethora of opportunities for economic growth but also it remains a contentious issue in Canada and the U.S., with the cancellation of the Keystone XL pipeline emblematic of growing anti-pipeline sentiment. In 2021, only 14 petroleum liquids pipeline construction plans were completed in the U.S., which is considered the lowest amount of new pipelines and expansions ever since 2013.
Since the U.S. has banned Russian oil imports and Russia’s impending export of raw materials, domestic energy production is needed as never. It turned out that North American consumers are now facing surging gasoline and energy prices as foreign oil is proving to be far less reliable in times of geopolitical mess.
Anti-pipeline sentiment did not come out unexpectedly as leaks and spills in just the last decade have resulted in billions of dollars of damages. From 2010 to 2020, the Pipeline and Hazardous Materials Safety Administration reported 983 incidents that resulted in 149,000 spilled and unrecovered barrels of oil, even five fatalities, 27 injuries, and more than $2.5B in damages.
Fortunately, over the last five years, liquid pipeline incidents have decreased by 21% while pipeline mileage and barrels delivered have grown by more than 27%. In addition to these infrastructure improvements, pipeline developers and operators stress the lack of better alternatives, as freight and seaborne transportation are both far less efficient and result in more carbon emissions.
Meanwhile, pipelines stay vital components of energy consumption all over the U.S. and Canada, and as global energy markets meet supply squeezes, sanctions, and geopolitical turmoil, the focus on them has increased. So if you are further interested in learning more about pipelines and refineries in the Permian Basin, please, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business. Tel. +1 713-203-3128 Email: firstname.lastname@example.org
The joint project to improve and market a low-carbon hydrogen and ammonia production and export facility was presented on May, 6 by Enbridge Inc. and Humble Midstream LLC. Deployment of the facility is taken under the Enbridge Ingleside Energy Center (EIEC) basis close by Corpus Christi. Being the premier export facility on the U.S. Gulf Coast, the EIEC plays a vital role in world energy security and sustainability. Companies plan to develop a utility-scale efficiently low carbon production facility, able to combine both low-carbon hydrogen and ammonia to meet the growing global and domestic demand. It is expected to sequester up to 95% of CO2 generated in the production process in carbon capture facilities, especially ones owned and operated by Enbridge which makes this process a fully integrated low-carbon solution.
The ever-increasing demand for natural gas exports from the Gulf Coast started a race to further develop Permian Basin. Various companies, including Kinder Morgan and MPLX, are among those looking at building new pipelines in the region due to the demand spike. But Energy Transfer seems to edge past them into the lead since its project strikes as the most economical option for the basin outside of capacity expansions on existing pipelines and could essentially add 1.5-2 Bcf/d of transport capacity with just 260 miles of new pipe.
According to a press announcement on June 29, Baker Hughes got a contract to supply electric-powered Integrated Compressor Line (ICL) decarbonization technology and turbomachinery equipment for an upcoming natural gas transmission project by a subsidiary of Tellurian Inc. – Driftwood Pipeline LLC. Driftwood Pipeline decided that the projects of Lines 200 and 300 would be situated in Beauregard and Calcasieu Parishes in southwest Louisiana and it will be the first time when Baker Hughes installs its ICL technology for pipeline compression in North America. Joey Mahmoud, president of Tellurian Pipelines, says the company expects that the project will give upwards of 5.5 Bcf of natural gas every day, with virtually no emissions. As a part of the agreement, Tellurian makes the initial $240 million pipeline investment as part of the broader Driftwood Pipeline system, which will keep enhanced supply reliability to meet the area’s projected industrial enlargement in a purer, more sustainable way. Baker Hughes has installed over 50 ICL units across the different pipeline and offshore applications, mainly in Europe. The compressors exert a reduced environmental footprint because their hermetically sealed casing prevents emissions from obviating. It is important to mention, that they require minimal downtime as magnetic bearings are resulting in more efficient operations and low maintenance.
On 27 June, the analysts at Kpler spread the word that the exports of crude oil from the U.S. Gulf Coast could break a record 3.3 MMbbl/d this quarter as Europe has regard to U.S. crude which can outweigh sanctioned Russian oil. Due to Washington's decision to release 180 MMbbl of oil from the nation's Strategic Petroleum Reserve, U.S. exports have increased in the last three months, as it has flooded the domestic market. Exports to Europe are anticipated averaging approximately 1.4 MMbbl/d this quarter, about 30% higher than the year-ago quarter, meanwhile, export to Asia is set to decrease to less than 1 MMbbl/d. Despite that the U.S. has lost about 1 MMbbl/d of refining capacity since 2020, it also boosted exports thanks to the government’s intervention to back crude supplies which has had consequences in growth in exports. Throughput via the Port of Corpus Christi has grown by more than 150,000 bbl/d and has become 1.86 MMbbl/d. Nevertheless, Port of Houston exports also have been increasing since the third quarter of last year, they remain below pre-pandemic levels.
Earthstone Energy Inc., based in Texas, announced the transaction on June 28: the acquisition of Titus Oil&Gas which will raise production in the Delaware Basin by 26%. The $627 million acquisition fills the Permian Basin in Eddy and Lea counties, N.M. with 86 net locations on 7,900 net acres of leasehold, while it is not clear how much of the leasehold might be on federal acreage It is Earthstone’s seventh acquisition since 2021, a span that includes the closing of approximately $1.89 billion in acquisitions in the Permian Basin. The purchase of Titus Oil & Gas Production LLC and Titus Oil & Gas Production II LLC, privately held companies backed by NGP Energy Capital Management LLC, is estimated at $575 million in cash and it is the equivalent of $52 million in stock (3.9 million shares of its Class A common stock based on the June 24 closing price). Titus shared that its net production in June was 31,800 boe/d. The company had reserves of approximately 28.9 MMboe. Earthstone is sure its net production will increase, at the midpoint, by 20,500 boe/d (65% oil) in the fourth quarter.