Enterprise Products Partners LP’s wholly owned affiliate M2E4 LLC has reached long-term agreements that support a further expansion of the Midland to Enterprise Crude Houston (ECHO) oil pipeline system. Enterprise will build a pipeline connecting its 6 million-bbl Midland, Tex., storage site to the ECHO Terminal through its Eagle Ford system in South Texas.
The pipeline will have an initial capacity of 450,000 b/d expandable to as much as 540,000 b/d. Enterprise’s Houston crude oil distribution system includes more than 45 million bbl of storage, 4 million b/d of export capacity, and connections to every refinery in the Houston, Texas City, and Beaumont-Port Arthur area, representing roughly 4.5 million b/d of capacity. M2E4 is expected to begin service in first-half 2021.
In addition to supporting crude oil production growth from the Permian basin, M2E4 will allow Enterprise to optimize its Midland to ECHO system, which will be comprised of four pipelines. Enterprise expects to achieve as much as $60 million of annualized savings, primarily from a reduction in the use of reducing agents and more efficient pump operations.
M2E4 also will allow Enterprise to maximize the operational flexibility of its Seminole Red Pipeline in either crude oil or NGL service based on the needs of the respective markets. Earlier this year, to respond to demand for crude oil pipeline capacity from Midland to the Houston market, Enterprise converted this Seminole Red line from mixed NGLs to crude oil service.
Enterprise expects NGL production from the Permian basin to increase by more than 50% by 2025 and plans to convert the Seminole Red line back to NGL service during second-half 2021. Enterprise estimates it can change service of the Seminole Red line from crude to NGL in less than 60 days. It will retain the flexibility to convert the pipeline back to crude service.
The partnership expects crude oil and NGL production from the Permian basin and Eagle Ford to increase by 5 million b/d by 2025. Its aggregate total crude pipeline capacity from the Permian to ECHO will be able to swing from 1.4 million b/d to 1.8 million b/d depending on market demand.