Shale Daily / NGI All News Access

Oxy Unit Offering Crude Capacity on Cline Shale Pipeline

Occidental Petroleum Corp. (Oxy) unit Centurion Pipeline LP is holding an open season through July 1 for capacity to transport crude oil from Irion, Sterling, Coke, Tom Green and Mitchell counties in West Texas to Centurion's Colorado City, TX, station. The project targets crude oil production from the Permian Basin's Cline Shale, which is thought by some to be "the next Eagle Ford."

The proposed Cline Shale Pipeline System originating near Barnhart, TX, will be capable of transporting 75,000 b/d of crude oil to the Colorado City station with an additional interconnection at Colorado City to the proposed BridgeTex Pipeline, which is expected to provide access to the Texas Gulf Coast by July 2014.

Occidental announced the restart and expansion of Centurion in February (see Shale Daily, Feb. 26).

The proposed Cline Shale system includes 100 miles of new pipeline and several origination stations, each able to receive crude oil via truck or pipeline. The pipeline is expected to begin service in the second quarter of 2014, subject to sufficient commitments from shippers and receipt of all required regulatory approvals.

The Cline Shale is about 140 miles long, 70 miles wide and 200-550 feet thick. It lies above the eastern shelf of the Permian Basin; by some it is considered the D interval of the Permian aged Wolfcamp shale.

Some call the Cline "the next Eagle Ford." Producers in the play include Devon Energy, Apache Corp., Pioneer Natural Resources and Range Resources. Last summer Japan's Sumitomo Corp. agreed to pay Devon Corp. $1.4 billion for a 30% stake in 650,000 net acres in the Permian Basin's Cline and Midland-Wolfcamp shales (see Shale Daily, Aug. 2, 2012).

Based upon Devon's exploration activities in the Cline Shale, early estimates have suggested that recoverable reserves could equal 30 billion bbl of oil.

Centurion is not alone in targeting Cline crude production. In April Enterprise Products Partners said it might repurpose a portion of its 1,373-mile Seminole pipeline, which currently transports natural gas liquids from the Hobbs hub and the Permian to markets in south Texas. "We are very excited about what we are hearing and seeing from the Wolfcamp and Cline shale...and we have some pipelines that go through there, one of which is the Seminole pipeline..." said Enterprise's Bill Oerdemann at the time (see Shale Daily, April 22).

For information on the Centurion open season, contact Oxy's Mike Carosio at (713) 350-4758, mike_carosio@oxy.com, or visit the project website.

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