Wow, this story has so many story lines. I'm too exhausted to to through them tonight but I will link / post the story and see what comes of it over the next few days.
The story: another pipeline is dead. Philliops 66 pulls out of deferred Liberty Pipeline project. This is NOT good news -- if the DAPL is shutdown .....
From the linked S&P Global Platts article:
Phillips 66 Partners is officially pulling out of the long-deferred Liberty Pipeline project that was designed to move 350,000 b/d of crude oil from the Rockies and Bakken Shale to the benchmark Cushing, Oklahoma, hub, the company said.
The Phillips 66 Partners-led pipeline project was put on indefinite hold more than a year ago when the pandemic crushed global crude oil demand and, since then, the US energy sector has kept tight reins on capital spending.
Phillips 66 Partners will record an estimated impairment of between $180 million and $210 million in the first quarter for pulling the plug on the long-dormant project, it said in a statement April 5. The pipeline would have stretched 700 miles from Guernsey, Wyoming, to Cushing, including a connection to a previously proposed Platteville, Colorado, terminal.
Phillips 66 Partners' joint-venture partner Bridger Pipeline and its parent, True Companies, did not respond to requests for comment, but Bridger already is exploring pipeline alternatives with new partner Tallgrass Energy through recently launched open seasons.
The decision on the Liberty Pipeline is not surprising considering that Phillips 66 in October canceled the planned Red Oak Pipeline from Cushing to the Texas Gulf Coast. Red Oak and Liberty were both proposed and, subsequently, deferred at the same times. So, when Red Oak was killed, it seemed like a similar result for Liberty could follow.
Both the Red Oak and Liberty pipelines were originally scheduled to be in service in the first quarter of 2021.
A new Bakken pipeline. Details:
- Liberty Pipeline, a joint venture between two companies:
- Phillips 66
- Bridger Pipeline
- The project:
- origin: the Bakken; southwest corner of North Dakota
- via: Guernsey, WY
- terminal: Cushing, Oklahoma
- route not yet clear
- proposed capacity: 200,000 bbls
- cost: $1.6 billion
- in-service date: as early as 1Q21 (hope springs eternal)
700-mile pipeline project; at $1.6 billion, that works out to $2.3 million / mile. I've been using a back-of-the-envelope figure of one million dollars / mile pipeline all these years -- it looks like that figure is obsolete, at least for longer pipelines which would also need pumping stations, other infrastructure support much shorter pipelines might not require. I don't know. But $2.3 million / mile is eye-catching.
Maybe I'm missing something but killing a pipeline that would serve both the Powder River Basin and the Bakken is very, very interesting. Others have the same thought.
This is the first I have read about this pipeline. From my perspective there is no reason for the cancellation of this pipeline and for that matter any other, unless it has a very serious impact on the local environment.
ReplyDeleteI suspect the reason for its shutdown is all politics and catering to the "No Carbon Enviro groups." It certainly has nothing to do with efficiency nor safety of moving its product line to the market place.
And now Uncle Joe, wants to earmark $100 billion in additional credits for EVs;
as they paid no road tax for the use of byways!
Hans
Great note, thank you. You are 1000% correct. Killed for political reasons; caved to environmentalists. And killed just at the wrong moment with the renewed interest in the Powder River Basin and the possibility that the DAPL will be shut down.
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