Phillips 66 and Bridger Pipeline have announced preliminary plans for a new pipeline to transport Bakken crude oil to Corpus Christi, Texas.
The proposed Liberty Pipeline would transport 350,000 barrels of oil per day from the Bakken and Rockies production areas, the companies announced in a news release.
Details about the pipeline route or where it would originate were not announced.
The companies launched an “open season” on Monday, which means they are gauging interest from the industry in the proposed pipeline.
Bill Salvin, a spokesman for Bridger Pipeline, said there’s a need for more crude oil pipeline capacity from both North Dakota and Wyoming. Interest from shippers will determine the final pipeline route.
The project would involve a combination of new construction and expansion of existing pipelines, Salvin said.
If the project moves forward, it’s anticipated to begin operating in the fourth quarter of 2020. It would need approval from regulators, including the North Dakota Public Service Commission.
The pipeline would have the ability to expand further depending on interest from shippers, the companies said.
Ron Ness, president of the North Dakota Petroleum Council, called the announcement great news.
“I think we’re seeing the market respond as we had anticipated or hoped once we started showing the production increases,” Ness said.
North Dakota is projected to run out of crude oil pipeline capacity as the state’s production continues climbing.
The state produced an average of 1.29 million barrels of oil per day in August, the most recent data available. North Dakota has pipeline and refining capacity capable of handling about 1.37 million barrels per day, according to the North Dakota Pipeline Authority.
Dakota Access Pipeline recently announced plans to expand its capacity to 570,000 barrels of oil per day, up from 520,000 barrels per day.
Justin Kringstad, director of the North Dakota Pipeline Authority, projects the state’s oil production will increase from 2 million to 2.3 million barrels per day.
During a North Dakota Industrial Commission meeting in September, officials discussed the need for more oil pipeline capacity to accommodate growing volumes.
“We really want to see another large oil export pipeline,” Lynn Helms, director of the Department of Mineral Resources, said during the meeting.
Without sufficient pipeline capacity, rail transportation of crude oil will increase.
In August, 73 percent of Bakken crude oil was transported by pipeline, 18 percent by transported by rail, 6 percent was refined in the state and 3 percent was trucked to Canadian pipelines.