A subsidiary of Plains All American Pipeline LP (PAA) said an open season that ended Wednesday concluded with the Cactus II Pipeline in West Texas, connecting the Permian Basin to the Corpus Christi, TX, area, fully committed with long-term third-party contracts.
Shipper contracts total 525,000 b/d, composed of 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. Another 60,000 b/d is reserved for walk-up shippers.
"Affiliates of certain third-party contracted shippers have options (exercisable no later than mid-2018) to participate as joint venture partners for up to 35% of Cactus II," the Houston-based partnership said.
Cactus II is comprised of existing pipelines and two new pipelines. The first new pipeline would extend from Wink South to McCamey in Upton County. The second new pipeline would extend to the southeast from McCamey to the area of Corpus Christi and Ingleside on the South Texas coast.
PAA said last month it was proceeding with construction of the Cactus II Pipeline and holding a a second binding open season through last Wednesday. In announcing the open season, PAA said origin points would be in West Texas in Orla, Wink South, Midland, Crane and McCamey. The partnership expects to enter the pipeline into service in 3Q2019, after receiving the necessary permits and regulatory approvals.
Total capital cost of the two new pipelines is expected to be about $1.1 billion, with PAA's portion representing $700-750 million.
One year ago, PAA said it was expanding capacity of its Cactus Pipeline from McCamey to Gardendale, TX, to 390,000 b/d. In November 2014, the partnership announced plans to add more pumps to booster stations along the pipeline route, thereby increasing the pipeline's capacity from 250,000 b/d to 330,000 b/d.