Energy Transfer’s $5 billion acquisition of SEMGROUP in September has created a new opportunity for Bakken crude oil on the Dakota Access pipeline. As a result, the company has extended a binding supplementary open season it had opened in July.
Company officials talked about the new opportunity, which will arise in 2021 with the completion of the Ted Collins pipeline, during Energy Transfer’s third-quarter earnings call.
The Ted Collins pipeline will connect the dots between two of the nation’s largest oil terminals, one at the Houston Shipping Terminal, or HFOTCO, and the other in Nederland, Texas, company officials have said in prior media releases. Already there is more than one million barrels per day of existing crude oil capacity at the terminals. The company plans to expand that to over two million barrels per day going forward.
The Ted Collins pipeline would start with an initial capacity of more than 500,000 barrels per day capacity, beginning in 2021.
The extended supplementary season for the Dakota Access pipeline won’t delay the planned expansion of the line, company officials said.
“We have extended the open season on Dakota Access really just to accommodate the option to offer HFOTCO and the Houston Shipping Channel market to our customers,” Energy Transfer President Marshall “Mackie” McCrea said. “And once again, we are extremely pleased with how this open season has gone and look forward to our expansion in 2021.”
Mackey added that demand for shipping volumes on the line is very high. So high, that if the company could “snap its fingers” and have an additional 400,000 to 500,000 barrels per day in capacity, he thinks it would likely be immediately filled.
“Nothing really competes with Dakota Access,” Mackey said. “All of these (other) projects, when you look at the stacking of fees and where those markets are and the timing to get there, nothing really compares to a project that can deliver to the vast majority of the mid-continent refineries and then bring it down to the Gulf Coast to all the refineries in Texas and then through the Bayou Bridge get it to the St. James Markets.”
With these new market opportunities, company officials expect to ultimately expand the capacity of Dakota Access to 1.1 million barrels of Bakken crude oil per day. This will be done in phases, with the first expansion beginning in mid-2020 with 30,000 barrels per day, pending successful completion of permitting for new compressor stations.
Additional capacity, based on commitments in the supplementary binding season, will be brought into service by early 2021.
To accomplish this, Energy Transfer plans to build three compressor stations, one in North Dakota, one in South Dakota, and one in Illinois.
The North Dakota Public Service Commission held a public hearing on Wednesday, Nov. 15, to gather input on the North Dakota compressor station, which would be located in Emmons County.
The packed hearing collected 15 hours of testimony from both opponents and proponents of the project, and continued into Thursday afternoon.