Sunrise Pipeline set rates for its new crude pipeline extension from Loving County, Texas in the Permian basin to the storage hub of Cushing, Okla., effective Nov. 1, according to a regulatory filing on Oct. 1.
The startup of the expanded line is expected to ease a bottleneck that has depressed crude prices in nearby Midland, Texas for months. Crude is already flowing in the line and it is expected to go into full service in early November.
The pipeline established uncommitted spot rates at $1.69 per bbl and committed rates for anchor shippers at $1.70, while committed non-anchor shippers will be charged $1.75 a bbl, Sunrise said in a U.S. Federal Energy Regulatory Commission filing.
Committed shippers must have entered an agreement with Sunrise during the open season held in 2017. Anchor committed shippers must have contracted to ship at least 80,000 barrels per day (bbl/d) with Sunrise for a term of at least seven years.
The pipeline, operated by Plains All American LP, is one of two projects slated to begin partial operations slightly ahead of original schedules.
Plains’s 670,000 bbl/d Cactus II line from the Permian to Corpus Christi will begin partial service in third-quarter 2019.
Pipeline companies are racing to add lines as production in the Permian Basin, the largest U.S. oil patch, has outpaced pipeline shipping capacity. New lines are expected to add more than 1.5 MMbbl/d in additional capacity by mid-to-late 2019.
West Texas Intermediate at Midland traded at about $7 and $7.50 a bbl below benchmark U.S. crude futures on Oct. 1, well above a discount of about $17 a barrel in late August, the weakest level in four years.
Plains has been an active buyer in the spot market, scooping up barrels to fill the line and that has helped support prices, traders said.
One employee of a third party contractor involved in the work was injured in the explosion.
Howard Energy Partners (HEP) on June 13 announced that it has completed the expansions of its bulk liquid terminal facilities in Port Arthur and Corpus Christi, Texas.
Completion of the Rover pipeline, which is being built to boost Marcellus and Utica shale gas production, is not expected to be delayed by a U.S. federal order to stop new drilling to install pipe, Energy Transfer said.