S&P Global Platts has added the Cactus II and Midland-to-Echo II pipelines to its list of pipelines reflected in WTI Midland cargo assessments globally, effective January 2, 2020.
Platts' assessments of WTI FOB USGC, WTI Midland DAP Rotterdam, WTI Midland DAP Augusta, WTI Midland DES Singapore and WTI Midland DES Yeosu had previously reflected crude supplied via the BridgeTex, Cactus I, Longhorn and Midland-to-ECHO I pipelines, which flow directly from the Permian Basin to export terminals on the US Gulf Coast. Cactus II and Midland-to-ECHO II join this list of pipelines, providing a consistent framework for market-accepted sources of Midland-quality crude in the global market.
Platts' methodology for the delivered WTI Midland and Eagle Ford 45 crude assessments in Europe and Asia reflect the terms and conditions laid out for the FOB US Gulf Coast WTI Midland and Eagle Ford 45 assessments as published in Houston.
Cactus II pipeline, with a 670,000 b/d capacity, came online August 12 and moves Permian Basin crude from Wink, Texas, to terminals in Corpus Christi, Texas. The first US crude cargo originating from Cactus II was loaded in Corpus Christi on August 16. The pipeline is owned by Cactus II Pipeline, a joint venture between Plains All American and various minority owners.
Midland-to-ECHO II is part of the Midland-to-ECHO pipeline system owned and operated by Enterprise Products Partners. Midland-to-ECHO II began service April 1 and is a converted NGL pipeline with 200,000 b/d of capacity. Midland-to-ECHO I has 620,000 b/d capacity. The parallel pipeline system moves crude from the Permian Basin in West Texas to the Enterprise ECHO terminal in Houston.
The origin pipelines used as a basis for Platts' Midland-quality WTI cargo assessments globally may be expanded or modified over time to reflect market-accepted sources of Midland-quality crude shipped directly from the Permian Basin as Texas' crude oil infrastructure evolves. Platts publishes offers for WTI Midland supplied via other pipelines in the Market on Close assessment process, but such provenance would need to be explicitly stated. These may be normalized for assessment purposes to reflect standard quality supplied through one of the six pipelines listed above.
Platts would not publish bids that restrict supply to a specific terminal or pipeline, but will publish open origin bids in which buyers are willing to accept any material that meets their specification requirement. Platts also stipulates that crude oil supplied for trades reported in the MOC process should not contain any previously cracked or refined material.
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