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JV Backing New Texas-to-Louisiana Crude Conduit

A trio of companies has proposed to construct the Bayou Bridge pipeline to carry crude oil from the Phillips 66 and Sunoco Logistics Partners LP terminals in Nederland, TX, to Lake Charles, LA.

Along with Phillips and Sunoco, Energy Transfer Partners LP rounds out the joint venture.

The joint venture also plans to launch an expansion open season for service to the market hub in St. James, LA. Phillips 66 holds a 40% interest in the venture, and Energy Transfer and Sunoco Logistics each hold a 30% interest. Sunoco Logistics will be the operator of the system.

"The Bayou Bridge pipeline, combined with the storage and logistics capabilities of our Beaumont Terminal, provides enhanced opportunities to deliver North American heavy and light crudes into the Louisiana market that is heavily dependent today on marine and rail delivery of crude oil," said Phillips CEO Greg Garland, chairman. "The pipeline also complements other pipeline projects we have under way to deliver Bakken crude oil to the Gulf Coast."

Sunoco Logistics CEO Michael Hennigan said his company's "extensive pipeline system connects our West Texas Permian, southern Oklahoma, Granite Wash, Eaglebine and East Texas systems to our Nederland terminal and now will have enhanced capability to further deliver crude barrels eastward on the Bayou Bridge pipeline into Louisiana [see Shale DailyMay 13, 2013]."

Construction is under way on the Nederland-to-Lake Charles segment of the pipeline, which will be 30-inches in diameter and is expected to begin commercial operations in the first quarter of 2016. The companies will also launch a binding expansion open season during the third quarter to assess additional shipper interest for service with connectivity to existing terminal infrastructure and refineries in and around the St. James area. The results of the expansion open season will be used to determine the size of the pipeline to St. James, which has a forecasted in-service date of the second half of 2017.

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