Dallas-based Energy Transfer Partners is planning to build an 1100-mile oil pipeline from the Bakken shale play in North Dakota, potentially easing takeaway capacity restraints in the area.
The 30-inch diameter pipeline would initially provide 320,000 barrels per day of capacity, though Energy Transfer could increase that if demand warrants.
The line would carry crude from the Bakken to Patoka, Illinois, where it would feed into the Gulf Coast-bound Trunkline, which is being converted from a gas line to an oil line.
Energy Transfer will also develop a rail terminal facility in Illinois to access East Coast refineries.
The master limited partnership has already begun the process of ordering steel and negotiating construction contracts for the new line, which is expected to be in service by the end of 2016.
"The construction of the Bakken Pipeline project will help further develop the crude rich areas in and around the Bakken and provide additional US crude supplies to US markets and refineries along the East and Gulf Coasts," the company said in a statement.
The announcement comes as North Dakota governor Jack Dalrymple calls for more pipeline capacity to handle booming output from the Bakken and Three Forks plays. North Dakota is now producing in excess of 1 million bpd.
Enbridge and Marathon Petroleum just received regulatory clearance for their $2.6 billion, 616-mile Sandpiper pipeline project from near Tioga, North Dakota, to Clearbrook, Minnesota. Sandpiper will initially be able to handle up to 225,000 bpd of oil.
Enterprise Product Partners also said it is in the early stages of planning a 340,000-bpd line from Stanley, North Dakota, to the storage hub in Cushing, Oklahoma. No final decision has been made on that project, however.
In a separate announcement this week, Energy Transfer said it plans to build a natural gas pipeline with capacity of up to 3.25 billion cubic feet per day from the Marcellus and Utica shales to markets across the US and Canada.
Aubrey McClendon-based American Energy – Utica will be one of that pipeline's biggest customers, along with Antero Resources and Range Resources.
American Energy and Antero both have options to purchase non-operating equity interests in the project.