Spectra Energy and Spectra Energy Partners are proposing to expand its oil pipeline network to increase capacity to the Midwest.
The expansion would include a pipeline with service from Guernsey, Wyoming, to Patoka, Illinois. This announcement is in response to strong market demand to move light, sweet, U.S. domestic crude from multiple supply areas, including the Bakken, the Denver-Julesburg Basin and the Powder River Basin, to Patoka, where shippers will be able to access Midwest and Gulf Coast markets.
The expansion may enable future access to eastern U.S. refiners as Spectra Energy continues to explore opportunities to serve those markets as well.
“We’ve had very strong indications of interest from shippers and believe that producers will achieve higher netback prices by accessing high value markets via this expansion,” said Greg Ebel, Spectra Energy’s chairman, CEO and president. “We are pleased by the strong demand we have seen for our existing crude oil system capacity. This success is driving our commitment to maximize our growth through organic expansion, and we believe this new option will be a welcome solution for customers wanting to move domestic oil to key U.S. markets.”
The expansion, which will be in service in 2017 with an initial capacity of approximately 400,000 barrels per day (bpd), will provide unprecedented access for shippers to reach markets in eastern PADD 2 (Midwest region) and the flexibility to meet light crude refinery demand on the Gulf Coast (PADD 3).