Phillips 66 Partners to Begin Construction of Permian-to-Corpus Christi Crude Oil Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--Phillips 66 Partners (NYSE:PSXP) (Houston, Texas), the midstream spinoff of Phillips 66 (NYSE:PSX) (Houston), has announced that, after a successful initial open season, it will commence construction on the Gray Oak crude oil pipeline, running from the Permian Basin to Corpus Christi, Texas, as well as refining hubs near Freeport and Houston. The project is a joint venture between Phillips 66 Partners (75%) and Andeavor (NYSE:ANDV) (San Antonio, Texas) (25%). Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) has the option to acquire up to 32.75% of the project, which would come from Phillips 66 Partners' share. Industrial Info is tracking more than $2 billion in Phillips 66 Partners pipeline projects.

The Gray Oak pipeline will have origination stations in Reeves, Loving, Winkler and Crane counties in West Texas, as well as locations from the Eagle Ford Shale. The capacity of the pipeline is still being determined. It was initially planned to transport 385,000 barrels per day (BBL/d), but Phillips 66 Partners and Andeavor are holding a second open season to determine if additional capacity is warranted. The second open season begins today (April 26). Depending on the results of this, the pipeline could transport up to 700,000 BBL/d, expandable to 1 million BBL/d. Construction could begin this summer, with completion set for 2019. For more information, see Industrial Info's project report.

Among the other active pipeline projects involving Phillips 66 Partners is the expansion of the Bayou Bridge crude oil pipeline, which it owns with Energy Transfer Partners (NYSE:ETP) (Dallas, Texas). The first section of the pipeline, which went into service in 2016, runs from Nederland, Texas, to Lake Charles, Louisiana. The pipeline extension will transport up to 480,000 BBL/d of crude oil from Lake Charles to St. James, Louisiana. The project is expected to be completed in the second half of this year. Troy Construction LLC (Abilene, Texas) and Sunland Construction Incorporated (Delcambre, Louisiana) are general contractors on the project, which has an estimated total investment value (TIV)( of $300 million. For more information, see Industrial Info's project report.

Another pipeline project with which Phillips 66 Partners is involved is the expansion of the Sand Hills natural gas liquids (NGL) pipeline, which it owns with DCP Midstream Partners (NYSE:DPM) (Denver, Colorado), itself a joint venture of Phillips 66 and Enbridge. The Sand Hills pipeline runs approximately 720 miles from the Permian and Eagle Ford formations to Mont Belvieu, Texas. The pipeline will be expanded in two phases beginning in 2018 and 2019. This year, six loops will be added that are between 10 and 25 miles long to expand the pipeline to up to 450,000 BBL/d of capacity. In addition, several pump stations will be constructed. For more information, see Industrial Info's project report.

The next, larger phase of the Sand Hills expansion is expected to kick off early next year. This project involves laying approximately 600 miles of 20-inch-diameter pipeline loops to increase capacity to 550,000 BBL/d of NGL. The project, which has an estimated TIV of $650 million, is planned for completion in the fourth quarter of next year. For more information, see Industrial Info's project report.

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