Phillips 66 takes lead on Texas-to-Louisiana pipeline joint venture

(AP Photo/Lisa Poole, File)
(AP Photo/Lisa Poole, File)

Houston-based Phillips 66 is taking the lead on a pipeline project to pump crude oil from terminals in southeast Texas to Lake Charles, Louisiana.

Phillips 66 is teaming up with Dallas-based Energy Transfer Partners and Philadelphia’s Sunoco Logistic Partners in a joint venture to build the new Bayou Bridge pipeline that will deliver crude from the Phillips 66 and Sunoco terminals in Nederland. The joint venture also will launch an expansion and customer search for service to the market hub in St. James, Louisiana.

Phillips 66 holds a 40 percent interest in the joint venture, while Energy Transfer and Sunoco each hold a 30 percent. However, Sunoco will serve as the operator of the system.

They are declining to reveal the project costs.

“The Bayou Bridge pipeline, combined with the storage and logistics capabilities of our Beaumont Terminal, provides enhanced opportunities to deliver North American heavy and light crudes into the Louisiana market that is heavily dependent today on marine and rail delivery of crude oil,” said Greg Garland, chairman and CEO of Phillips 66 in a prepared statement.

“The pipeline also complements other pipeline projects we have underway to deliver Bakken crude oil to the Gulf Coast,” Garland added.

The pipeline will connect to systems from the Texas’ Permian Basin, Eagle Ford Shale, East Texas, the Texas Panhandle and southern Oklahoma, said Michael Hennigan, president and CEO of Sunoco Logistics.

Construction has begun on the Nederland to Lake Charles segment of the pipeline, which will be 30 inches in diameter and is expected to begin commercial operations in the first quarter of 2016.

The companies will launch the binding open season on the expansion to terminals and refineries in St. James, Louisiana in the third quarter of the year. That process will help determine the size of the pipeline to St. James, which has a projected start up in the second half of 2017.