Andeavor to build crude oil pipeline system and marine terminal in US

Andeavor has signed two joint venture (JV) deals to construct the Gray Oak Pipeline and a new open access marine terminal in Texas known as the South Texas Gateway Terminal.

The crude oil pipeline will connect to the proposed terminal, which will be constructed on a 212-acre waterfront parcel at the mouth of Corpus Christi Bay. It will have an initial storage capacity of 3.4 million barrels of oil (boe).

The pipeline will be operated under a JV between Phillips 66 Partners and Andeavor on a 75:25 basis. The firms will transport crude oil to destinations in the Corpus Christi, Sweeny and Freeport areas.

The partners intend to construct stations in Reeves, Loving, Winkler and Crane counties, as well as locations in the Eagle Ford area.

Expected to transport up to 700,000 barrels of oil equivalent per day (boe/d) from the Permian Basin to downstream markets, the pipeline is set to become operational by the end of next year.

So far, the pipeline has secured third-party take-or-pay commitments. Andeavor and Phillips 66 are holding a second binding open season for the Gray Oak Pipeline to secure additional supporters to help determine the ultimate scope and capacity of the pipeline.

Expected to serve as the outlet for crude oil and condensate volumes from the Gray Oak pipeline, the South Texas Gateway Terminal is set to be developed under a JV between Buckeye Partners (50%), Phillips 66 Partners (25%) and Andeavor (25%).

Buckeye executive vice-president Khalid Muslih said: “The terminal will provide customers with logistics solutions that connect the region’s rapidly growing crude oil production with advantaged access to global markets.

“This project expands our presence in the important Corpus Christi market, which we believe offers strong competitive advantages for waterborne shipments of crude oil and other petroleum products from the fast-growing Permian and Eagle Ford shale plays.”

The terminal is scheduled to be placed in service by the end of next year.