Enterprise Products’ new 200,000 barrel per day Seminole-Red crude oil pipeline from the Permian Basin to Houston is operational, according to infrared imagery collected by Genscape on February 6, 2019. One of the two turbines associated with the crude pipeline at the Coupland, TX, pumping station was active at the time of imagery collection, indicating that the pipeline started operations, at least under a limited capacity. Genscape also collected infrared imagery at the Millersview, TX, pumping station. The two turbines associated with crude service at that location were offline at the time of imagery collection.
The startup of the Seminole-Red pipeline comes as the crude price differential between WTI-Midland and WTI-Houston narrowed. While the current spread is still wide enough to cover transportation costs, margins may diminish enough that traders shun the newly available pipeline space that Seminole-Red has to offer. And, despite continued increases in production - Genscape forecasts show Permian production adding another 450,000 bpd by August 2019 when the next Permian outbound pipeline is slated to come online - the Seminole-Red pipeline may help keep those differentials tight in the coming months.
Enterprise recently converted part of the 280,000 bpd Seminole NGL pipeline into crude service. The Seminole NGL pipeline previously consisted of two parallel pipelines, Seminole-Blue and Seminole-Red. The Seminole-Red pipeline was converted to a 200,000 bpd crude pipeline, according to permitting documents. The Seminole-Blue pipeline remains under NGL service. Enterprise announced on January 31, 2019, that it expected the repurposed Seminole crude pipeline to begin limited operations in February 2019 and full operations in April 2019.
Genscape will continue to produce intelligence reports on the Seminole-Red pipeline and will provide any updates on its apparent utilization via our Gulf Coast Pipeline monitoring service.