Enterprise Products (EPD) plans to convert its Seminole Pipeline back to crude oil service next year, the latest flex by EPD for the multi-use pipeline. The project, part of a push by midstream companies to add takeaway for Permian crude oil over the next 12-16 months, will impact the balances for crude and NGLs to the Gulf Coast.
In a recent investor update, Enterprise confirmed plans to return the 200 Mb/d Seminole (formerly known as Midland-to-Echo 2, or M2E2) from NGL service back to crude oil later in 2025. The conversion follows an announcement last month by Enbridge (ENB) to expand Gray Oak Pipeline by ~120 Mb/d from the Permian to Corpus Christi. The projects together will boost crude oil egress capacity from the Permian Basin by 3% (+320 Mb/d), according to East Daley’s Crude Hub Model (see figure).
Since December 2023, Enterprise has used Seminole to move NGLs from its Delaware and Midland processing plants to its fractionator complex in Chambers County on the Texas Gulf Coast. EPD is building a dedicated NGL line, the Bahia pipeline, and will no longer need Seminole to carry NGLs once Bahia is ready, executives said at EPD’s recent investor day presentation. EPD is targeting start-up of Bahia in 3Q25.
The back-and-forth conversions highlight EPD’s flexibility to meet market demand across commodities. The company converted Seminole to M2E2 in 2019 to ease Permian crude egress constraints. In 2023, EPD saw an opportunity to repurpose its Chaparral NGL pipeline to feed refined products to the Rockies. However, given the tightening NGL egress capacity in the Permian and excess crude capacity, EPD then switched M2E2 back to NGL service as Seminole. (Note: East Daley follows the pipeline as ‘Seminole’ in the NGL Hub Model and ‘Midland-to-Echo 2’ in the Crude Hub Model).
Now, with Permian crude egress expected to fill above 90% and NGL egress to be at 72% in 2025, EPD can again use its existing infrastructure to rationalize excess capacity in one commodity (NGLs) and add much-needed capacity in another (crude).
EDA’s Production Scenario Tools forecast Permian Basin crude oil production to grow by 368 Mb/d from YE23 through YE24. With this growth, the Crude Hub Model shows Gray Oak will remain in the 85-90% utilization range as ENB increases egress by 80 Mb/d in 2H24 and another 40 Mb/d in 1H25. M2E2 also reaches ~90% utilization within 12 months of returning to crude service in our model (see figure). As Permian production grows by 1.3 MMb/d through YE28, pipeline takeaway available today fills to 97% utilization out of the basin.
Meanwhile, in our Purity Product Forecast and NGL Hub Model, growth of ~700 Mb/d in Permian Y-grade production can be comfortably handled by 1.4 MMb/d of new NGL pipeline capacity. The Seminole conversion will remove ~150 Mb/d of capacity from the balance. Although the pipe additions will still outpace new NGL production, the loss of Seminole can help support overall transportation rates. For Enterprise, the project allows the company to rapidly ramp up its Bahia NGL pipeline. – Kristine Oleszek and Ajay Bakshani Tickers: ENB, EPD.
Coming Soon: Permian Crude Oil Supply & Demand
Introducing EDA’s latest breakthrough: the Permian Crude Oil Supply and Demand analysis. Dive into the intricate landscape of Permian crude oil production, infrastructure, and downstream demand with unparalleled depth and clarity. Request more information on Permian Crude Oil Supply and Demand.
Available Now: Ethane Supply and Demand Report and Data Set
This is a comprehensive data file and report that provides valuable insights into historical and forecasted supply and demand components for ethane. The report covers crucial metrics such as ethane supply from US gas processing plants, and demand from domestic ethylene steam crackers and ethane exports. Learn more about the Ethane Supply and Demand Report and Data Set.
Access the NEW G&P System Financial Dashboard
We are thrilled to introduce a groundbreaking addition to our suite of energy management tools: the G&P System Financial dashboard. This dynamic tool is designed to revolutionize how you scope and analyze multiple financial metrics and throughput forecasts for individual G&P systems across the US. Clients can log in to Energy Data Studio to review the G&P System Financial dashboard protype. Learn more here.
Sign Up for the NGL Insider
East Daley NGL Insider provides weekly updates on the US NGLs market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on NGL flows, infrastructure, and purity products. Sign up now for the NGL Insider.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
-1.png)