Energy Transfer will ask the Texas Railroad Commission to allow it to idle two pipelines in Texas and turn them into storage for around two million barrels of oil, the company told a local media outlet.
The news follows a similar move from Enterprise Products Partners, which this month asked to open the northbound capacity of its Seaway pipeline, offering US oil producers struggling to place their oil near the Gulf Coast to ship their barrels to the primary storage hub at Cushing, Oklahoma.
A filing with the US Federal Energy Regulatory Commission (FERC), as carried by Reuters, said: “Given the current turmoil in the crude oil market, including impacts on both refinery and export demand, there is strong market interest to access the Cushing storage market.”
Analysts think that available storage in Cushing will fill up by the end of May at the latest, “if demand doesn’t materially pick up by then”.
If Energy Transfer’s plan is approved, “After that it will be a matter of adding pumps to the lines, which we can easily achieve,” Energy Transfer said.
It added: “We estimate we can be ready by mid-May.”
For more information visit www.energytransfer.com