Oklahoma Oil Hub Getting Bigger with New Pipelines

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New pipeline projects are expanding the size of an Oklahoma crude oil hub that is already one of the most important oil storage facilities in the world.

One new pipeline is in operation at the hub in Cushing, another is almost complete and a new project was announced earlier this month when Tulsa-based NGL Energy Partners revealed plans for the Grand Mesa Pipeline, a joint venture with Rimrock Midstream LLC, the Tulsa World reported Saturday.

Grand Mesa, which will be open to oil producer commitments starting next week, will be a 550-mile system from Colorado to Cushing. Once completed, the pipeline could move more than 130,000 barrels per day from production.

“The pipeline not only supports the continued growth and production in the area, but does so in a cost-effective and environmentally responsible way by reducing the current utilization of rail and truck and transportation,” according to a statement from NGL.

The Grand Mesa, if it gains sufficient commitments to be built, will be the third major pipeline connecting to the already busy Cushing hub. Enbridge is putting the finishing touches on its Flanagan South project from the Chicago area to Cushing, while Tulsa-based SemGroup completed its White Cliffs II earlier this summer.

“The additional pipeline capacity being added to deliver crude into Cushing underscores the critical role Cushing plays as a major crude oil logistics interchange and marketing hub,” Carlin Conner, CEO for both SemGroup and Rose Rock, said in a statement.

Cushing is the pricing settlement point for West Texas Intermediate crude on the New York Mercantile Exchange. The tank farms there hold more than 70 million barrels and include terminals for Rose Rock, Enbridge, Plains All-American Pipeline, Magellan Midstream Partners and others.

Flanagan South, once operational in the coming weeks, will run 600 miles and carry up to 600,000 barrels per day. The new pipeline runs nearly along the same route as Enbridge’s existing Spearhead system from the Flanagan, Illinois, terminal to Cushing.