Plainview Weekly: Bayou Bridge Pipeline Cuts Rates and BP's Whiting Refinery Catches Fire (10/13-10/19)
Midwest Outage and Gulf Coast Deal: Navigating Oil Supply Shifts in a Volatile Market
Bayou Bridge Pipeline’s New Tariff: 70K BPD Commitment Cuts Rates to Lake Charles Refineries
Bayou Bridge Pipeline filed a new tariff on Friday, establishing a new minimum volume commitment of 70,000 barrels per day and canceling prior three- and five-year arrangements that had expired. The updated rate stands at $0.89 per barrel, representing a $0.12 reduction from the previous three- to five-year term pricing, though the new commitment level is higher than the prior minimum of “at least 5,000 barrels per day”. This 5-year tariff applies to the shorter-haul segment transporting crude from the Nederland/Port Arthur areas to Lake Charles, Louisiana, where it supplies major refineries including CITGO’s and Phillips 66’s facilities.
The shorter-term nature of the new contract points to CITGO as the likely counterparty, replacing an expired commitment which aligned well with their historical deliveries. Since entering service in 2016, the pipeline has achieved steady volume growth on the Nederland/Port Arthur-to-Lake Charles route, demonstrating operational success in that corridor, though it continues to face challenges in securing substantial flows for the onward leg to St. James.
BP Whiting Refinery Fire: Possible Impacts to BP 1, BP 2, and Enbridge Mainline
A fire broke out at BP’s 440,000-barrel-per-day oil refinery in Whiting, Indiana, on Friday morning due to an operational accident but was swiftly extinguished, according to the company. Several units at the facility remained offline through Friday, exacerbating disruptions from ongoing planned maintenance that began in mid-September and is slated to continue for two months. This follows an earlier incident in August, when multiple units were shut down for over a week amid flooding caused by a thunderstorm.
The Whiting refinery relies on two BP-owned pipelines for crude supply: the BP1 line, which transports crude from the Cushing hub at approximately 100,000 barrels per day, and the BP2 short-haul line, which draws from Enbridge’s Lakehead system and operates between 300,000 and 350,000 barrels per day. An extended outage at the refinery could impact flows on Enbridge’s mainline, though ample storage capacity on the Midwest pipelines and at terminals provides a significant buffer to absorb excess volumes.
Flow/Transaction Updates and New Assets Under Coverage
Plainview has over 250 assets with crude oil flow 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.
News that Caught our Eye
Gunvor Chief Says Oil Oversupply Is Finally Taking Shape
US, Canada consider reopening Keystone XL pipeline in trade talks