Phillips 66 forms crude oil pipeline JVs

June 10, 2019
Phillips 66 has formed two separate 50-50 joint ventures to build pipelines that will transport crude oil from the Rockies and Bakken production areas to Cushing, Okla. and from Cushing and the Permian basin in West Texas to the Gulf Coast.

Phillips 66 has formed two separate 50-50 joint ventures to build pipelines that will transport crude oil from the Rockies and Bakken production areas to Cushing, Okla. and from Cushing and the Permian basin in West Texas to the Gulf Coast.

The company and Bridger Pipeline LLC formed Liberty Pipeline LLC to proceed with construction of the 24-in. Liberty Pipeline to transport crude oil from the Rockies and Bakken production areas to Cushing. Phillips 66 will lead project construction and operate the pipeline. The project is expected to cost $1.6 billion.

With Plains All American Pipeline, Phillips 66 formed Red Oak Pipeline LLC to construct the Red Oak Pipeline system to transport crude oil from Cushing and the Permian basin in West Texas to Corpus Christi, Ingleside, Houston, and Beaumont, Tex. Initial service from Cushing to the Gulf Coast is targeted to begin as early as first-quarter 2021, subject to receipt of applicable approvals.

The Red Oak JV will lease capacity in Plains’ Sunrise Pipeline system, which extends from Midland to Wichita Falls, Tex. The JV plans to construct a 30-in. pipeline from Cushing to Wichita Falls and Sealy, Tex. From Sealy, the JV will construct a 30-in. pipeline segment to Corpus Christi and Ingleside and a 20-in. pipeline segment to Houston and Beaumont. Plains will lead project construction and Phillips 66 will operate the pipeline. The project is expected to cost $2.5 billion.

On both the Liberty and the Red Oak systems, where feasible, the companies will use existing pipeline and utility corridors and advanced construction techniques to limit environmental and community impact. Initial service on both pipelines is targeted to begin as early as first-quarter 2021. Both pipelines are underpinned with long-term shipper volume commitments with plans for supplemental biding open seasons expected later.