SAN ANTONIO–(BUSINESS WIRE)–EPIC today announced that it has received sufficient customer interest to sanction the proposed 730-mile crude pipeline running from the Permian Basin to Corpus Christi based upon volume commitments and acreage dedications.
Following the successful Open Season originally initiated in March of this year, EPIC announced an additional ten-day Open Season last week to offer remaining firm-capacity out of both the Permian and Eagle Ford basins, with the latter having terminals in Gardendale and Helena.
EPIC Crude Pipeline Commercial Update
The 730-mile crude petroleum pipeline runs across Texas from Orla in the Permian Basin to the Port of Corpus Christi with capacity up to 590,000 barrels per day. The project includes terminals in Orla, Pecos, Crane, Wink, Midland, Helena and Gardendale, with Port of Corpus Christi connectivity and export access.
Expected to be in-service in 2019, the EPIC Crude Pipeline is being laid alongside EPIC’s previously announced NGL Pipeline System, which is currently under construction. Right-of-way acquisition commenced back in October after the EPIC NGL project was kicked off.
Distinctive to the EPIC crude project relative to traditional mainline pipeline commercial formats, customers have been provided the opportunity to make commitments through volume or acreage dedications.
Acreage dedication shippers for the crude project include Noble Energy, which is finalizing agreements with EPIC to dedicate substantially all of its gross acre position in Reeves County up to 75,000 barrels of oil per day. EPIC is in advanced discussions with numerous other producers in the Permian Basin to secure acreage dedications on similar terms.
Separately, another company has made an additional volume commitment of 75,000 barrels of oil per day.
Noble Energy and EPIC are finalizing the terms of a strategic relationship that will include an option to contribute equity in exchange for an ownership stake in the crude pipeline. Similarly, Noble will receive an option to participate in the EPIC NGL project currently under construction. The options, which include up to 30% ownership in the crude pipeline and up to 15% ownership in the NGL pipeline, expire in January of 2019 and can be exercised through Noble Energy, Inc. or its MLP subsidiary, Noble Midstream Partners LP.
EPIC CEO Phillip Mezey says that “bringing in a strategic partner such as Noble greatly enhances the Crude and NGL projects. We believe EPIC offers a differentiated value proposition to producers by providing a low-cost transportation option from the Permian Basin to Gulf Coast markets that includes no risk of deficiency through acreage commitments for Permian producers. It is also notable that there is a meaningful amount of capital and operating synergies between the Crude and NGL projects as they will share ROW and site locations.”