Canyon Crossing Pipeline Files Major Rate Hikes on Oklahoma-to-Perryton Crude Line
Base rates rise up to 60% and incentive rates up to 84% on the ~40,000 bpd leg feeding Valero’s McKee refinery; filing could add up to $10 million in annual revenue
Canyon Crossing Pipeline last week submitted a tariff filing detailing significant rate increases for crude transportation service from Oklahoma into Perryton, Texas. Agreed upon by all active shippers, the new rate structure includes substantial baseline adjustments: standard base rates are rising between 18% and 60% (depending on route), while incentive rates see an even steeper increase ranging from 28% to 84%.
Moving roughly 40,000 barrels per day over the past year (see graph below), this northern leg of Canyon’s network feeds directly into Valero’s interconnecting infrastructure which moves those barrels farther into the Texas Panhandle to supply its McKee refinery. Based on current throughput levels, back-of-the-envelope calculations suggest the filing could generate $5-$10 million in additional annual revenue, assuming volumes remain constant.
Canyon Crossing also operates a separate southern leg that transports approximately 60,000 barrels per day (see graph below) from Oklahoma to the Borger Refinery under a 10-year minimum volume commitment, likely held by Phillips 66.
Using Plainview’s “Related Assets” feature for the McKee refinery on our interactive oil platform (see below figure) shows how Canyon Crossing and other pipelines give McKee exceptional crude-slate flexibility. In addition to Oklahoma and Cushing barrels delivered via Canyon Crossing (dark blue line below), McKee receives Permian Basin crude from West Texas through the Centurion (red line) and Sunrise II (orange line) pipelines, which deliver into Sunoco LP’s McKee (formerly NuStar) system (pink line). These Permian barrels supply a little more than 100,000 barrels per day into McKee (see graph below). By balancing these dual supply arteries, Valero can dynamically optimize its refinery feedstock, blending Cushing grades with Permian crude in response to shifting midstream economics and market differentials.
Flow/Transaction Updates and New Assets Under Coverage
Plainview has over 400 assets with crude oil throughput or transactional data on our platform and continues to add more each week. Data for existing assets under coverage are posted as soon as they become available. Below are the assets that were updated this week or newly added to coverage.
