September 2021, Vol. 248, No. 9
Features
Energy Transfer Completes DAPL Expansion, Updates Pipeline Projects
By Jeff Awalt, Executive Editor
Energy Transfer said it has completed a phased expansion of Dakota Access Pipeline that boosted capacity to 750,000 bpd from 570,000 bpd even as it waged a legal battle for DAPL’s survival.
Higher crude oil volumes on the expanded Bakken system contributed to improved earnings in the second quarter, with gains primarily driven by Energy Transfer’s Intrastate Natural Gas Pipelines, Storage and Natural Gas Liquids (NGL) units.
“We recently placed the next phase of incremental capacity for the Bakken Pipeline Optimization project into service, which is supported by minimum volume commitments from long-term customers,” co-CEO Tom Long said during a conference call with investors. “With completion of this phase of the optimization, Dakota Access now has the ability to flow approximately 750,000 barrels per day.”
In May, a federal district court denied the Standing Rock Sioux Tribe’s request for an injunction to shut down Dakota Access and then dismissed the plaintiffs’ lawsuit against the Army Corps of Engineers.
“We continue to cooperate with the Army Corps in their preparation of the Environmental Impact Statement,” Long said.
Dallas-based Energy Transfer also provided updates on some of its other growth projects during the investor call, including:
Cushing-to-Nederland Pipeline
The company said it is moving forward with Phase 2 of its Cushing to Nederland Pipeline, which commenced joint tariff service in June to provide crude oil transportation from Energy Transfer’s terminal in Cushing, Oklahoma, to its recently expanded terminal in Nederland, Texas.
“We are now capable of transporting approximately 65,000 barrels per day of oil from the DJ Basin and Cushing area to Nederland. And we’re seeing a steady growth in volumes,” Long said, noting that the first phase of this project is fully contracted, with a large majority of those contracts coming from third-party shippers.
The next phase, which is expected to be in service during the first quarter of 2022, will increase Cushing to Nederland’s capacity to 120,000 bpd. That phase is also underpinned by third-party commitments, and “minimal capital spend” is required for the project, Long said.
Also at Nederland, Energy Transfer completed an expansion during the second quarter that raised the terminal’s NGL export capacity to 700,000 bpd.
“When combined with our export capabilities for our Marcus Hook Terminal, as well as our Mariner West Pipeline … our total NGL export capacity is now over 1.1 million barrels per day, which is among the largest in the world,” Long said.
Permian Bridge Pipeline
Energy Transfer’s new Permian Bridge natural gas pipeline is expected to be completed during the fourth quarter of 2021, Long said. The project will connect the company’s gathering and processing (G&P) assets in the Delaware Basin with its G&P assets in the Midland Basin.
“This project will allow us to move approximately 115,000 Mcf per day of rich gas out of the Midland Basin and operate existing capacity more efficiently, while also providing access to additional takeaway options,” Long said.
The Permian Bridge project includes the conversion of 55 miles of existing 24-inch NGL pipeline to rich gas service.
“This project is a good example of how we can preserve capital spend as we strategically look for ways to optimize, repurpose and expand our assets to provide us with competitive advantages,” Long added.
Ted Collins Pipeline
Energy Transfer announced plans in 2019 to construct this 75-mile crude oil pipeline between the Houston Ship Channel and Nederland to connect two of the largest crude oil terminals in the United States—Energy Transfer’s Nederland terminal and the Houston Fuel Oil Terminal.
Long this week said the Ted Collins Pipeline is progressing on schedule and expected to begin commercial operations in the fourth quarter of 2021.
Upon initial completion, this project will provide crude oil transportation of up to 150,000 bpd from West Texas and Nederland to Energy Transfer’s Houston Terminal and can be expanded to 300,000 barrels per day.
Mariner East System
Energy Transfer now expects the next significant phase of its Mariner East project to be in service in the current quarter and the final phase to be completed in the fourth quarter of this year, Long said.
During the second quarter of 2021, NGL volumes through the Mariner East Pipeline system increased about 15% over the second quarter of 2020.
“Today, we are seeing demand exceed our current throughput capacity, which will allow us to begin utilizing additional capacity as our next phase of Mariner East is brought online later this year,” Long said.
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