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Oil pipeline planned for West Texas

April 16, 2013 at 6:42 AM   |   Comments

HOUSTON, April 16 (UPI) -- A planned 20-inch crude oil pipeline will move crude oil more than 300 miles across parts of Texas, Plains All American Pipeline announced.

Plains announced it started constructing the Cactus Pipeline, described as a 310-mile crude oil pipeline across western Texas in the oil-rich Permian Basin.

Plains said the pipeline represents at least $350 million in investments and will carry sweet and sour crude oil blends.

The Cactus Pipeline is designed to carry as around 200,000 barrels of oil per day. The company said it expects the pipeline would go into service during the first quarter of 2015.

Triple Double Advisors analyst John White told the Houston Chronicle that additional pipeline capacity was needed to capitalize on the increase in production from shale oil plays in west Texas.

"That's a sizable quantity," he said of the pipeline's designated volume. "It's another piece of the West Texas, South Texas, Gulf Coast crude oil infrastructure build-out."

Plains said it has signed a letter of intent with an unnamed third part for the majority of the pipeline's capacity and is in talks with other shippers to make up the difference.

Topics: John White
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