PAA unit concludes open season for Cactus II crude pipeline

A unit of Plains All American Pipeline LP (PAA) has reported the conclusion of an open season for the Cactus II crude oil pipeline system, which will extend from the Permian basin to the Corpus Christi-Ingleside, Tex., area.

A unit of Plains All American Pipeline LP (PAA) has reported the conclusion of an open season for the Cactus II crude oil pipeline system, which will extend from the Permian basin to the Corpus Christi-Ingleside, Tex., area (OGJ Online, Jan. 25, 2018).

Capacity for the new system, with an initial capacity of 585,000 b/d, is fully committed with long-term, third-party shipper contracts totaling 525,000 b/d (425,000 b/d of long-term, minimum-volume commitments and an additional 100,000 b/d of commitments associated with long-term acreage dedications), PAA said. About 60,000 b/d of capacity is reserved for walk-up shippers.

Affiliates of certain third-party contracted shippers have options to participate as joint venture partners for as much as 35% of Cactus II. PAA is expected to retain 65% ownership and will serve as operator.

The pipeline includes a combination of existing and new pipe. The first new pipeline will extend from Wink South to McCamey, Tex., and the second pipeline from McCamey to Corpus Christi and Ingleside. The capital cost of the two new pipelines is expected to total $1.1 billion, with PAA's portion representing $700-750 million.

Permitting, right-of-way, and procurement activities are under way, and the pipeline system is targeted to start operations in third-quarter 2019.

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