Two U.S. pipelines are reshaping selected assets into a new system to ship imported crude oil from the U.S. Gulf Coast to inland refiners.
The new link is to include marine terminals and related tank storage on the Texas Gulf Coast and large diameter pipeline systems from the Gulf Coast to Cushing, Okla., owned by ARCO Pipe Line Co. and Phillips Petroleum Co. ARCO and Phillips agreed to pool the facilities to form Seaway Pipeline Co., a 50-50 venture based in Houston.
If plans proceed as expected, Seaway Pipeline by early 1996 will be able to ship 400,000-430,000 b/d of crude oil from joint venture terminals at Freeport and Texas City, Tex., to the crude transportation and storage hub at Cushing. Refineries in markets served by oil transportation hubs at Chicago, Wood River, and Patkoa, III., could receive Seaway crude shipments indirectly.
icons/ogj/930ARCO and Phillips estimate present pipeline capacity to move oil to Midcontinent and Midwest refiners falls about 250,000 b/d short of demand. When fully integrated, capacity of Seaway pipeline system could climb to as much as 800,000 b/d, depending on demand.
With two world class docks on the gulf and more than 7 million bbl of associated storage capacity, Seaway will be able to segregate and deliver a variety of imported crudes. That is expected to be adequate to meet future demand among inland U.S. refiners for imported supplies.
ARCO and Phillips emphasized that facilities needed to fully integrate the former ARCO and Phillips assets are to be complete within the next year. After that, the pace of Seaway expansions will not be limited by capacity on the Gulf Coast to inject crude into the system.
POOLED ASSETS
Key to Seaway's development is a Phillips plan to reactivate the idle Seagas pipeline, a 30 in. line from Freeport to Cushing. The 550 mile line originally was designed as a crude carrier to transport as much as 600,000 b/d of oil into Cushing. But lack of demand prompted Phillips in 1984 to convert the system to gas service and reverse the direction of its flow to south from north.
ARCO and Phillips have completed design engineering to convert Seagas back to a liquids pipeline. Phillips soon is to begin Federal Energy Regulatory Commission abandonment procedures to officially end its Seagas transportation role.
Phillips also is contributing to Seaway its two berth, 200,000 b/d Freeport 11 Dock and four 400,000 bbl storage tanks at the 4 million bbl Jones Creek tank farm, also at Freeport. Currently, Phillips transports all crude offloaded at the Freeport 11 Dock to its 175,000 b/cd Sweeny, Tex., refinery.
All major ARCO facilities to be pooled into to Seaway are in use.
They include a two berth marine terminal at Texas City capable of offloading as much as I million b/d of crude and 2.5 million bbl of related intermediate storage at two sites; a 550 mile, 16 and 20 in. pipeline from Texas City to Cushing capable of shipping 120,000-160,000 b /d of crude; and storage installations at various pump stations along the pipeline route.
Both the ARCO and Phillips terminals can accommodate crude oil tankers as large as 90,000 dwt or 150,000 dwt tankers if one-third of the cargo has been lightened.
COMPONENTS NEEDED
Before Seaway begins operating in early 1996, partners intend to complete a modest construction program to remove possible bottlenecks on the system. Most of the work aims to expand Seaway's ability to offload shipments of imported oil.
Dredging is under way at the Freeport 11 Dock to allow the terminal to offload longer oil tankers. When complete, Seaway's Texas City and Freeport terminals will be able to accommodate vessels as long as 1,020 ft.
Partners also intend to increase the number of loading arms at both terminals so all four berths will have three 20,000 bbl/hr arms for simultaneously offloading crude and one for tanker refueling. At Freeport, modifications are to include laying 7 miles of 42 in. pipeline to increase capacity between the dock and Jones Creek storage by at least 600,000 b/d.
If completed on schedule, combined offloading capacity of the Freeport and Texas City terminals early next year is to amount to at least 1.6 million b/d.
Presently, two 30 in. pipelines connect Freeport 11 Dock with Jones Creek, while Seaway's Texas City terminal can discharge crude into storage or to other refiners in the area through two pipelines-one 36 in. line and one 42 in.
In addition, minor modifications are to be completed at Cushing to better integrate the two pipeline systems.
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