Onshore Crude Oil Pipelines & Services

Our Onshore Crude Oil Pipelines & Services business includes approximately 5,254 miles of onshore crude oil pipelines and 12 MMBbls of above-ground storage tank capacity. Our pipeline systems gather and transport crude oil primarily to refineries, centralized storage terminals and connecting pipelines in Oklahoma, New Mexico and Texas. 

We own crude oil terminal facilities in Cushing, Oklahoma and Midland, Texas, which are an integral part of our onshore crude oil operations. In general, the crude oil terminals are used to store crude oil volumes for us and our customers. Under our crude oil terminaling agreements, we charge customers for crude oil storage based on the number of days a customer has volumes in storage multiplied by a contractual storage rate. 

Revenue from crude oil transportation is generally based upon a fixed fee per barrel transported multiplied by the volume delivered. Accordingly, the results of operations are generally dependent upon the volume of product transported and the level of fees charged to customers.

Our crude oil marketing activities generate revenues from the sale and delivery of crude oil obtained from producers or on the open market. These sales contracts generally settle with the physical delivery of crude oil to customers.

In November 2011, we and Enbridge Inc. agreed to reverse the direction of crude oil flows on the Seaway pipeline to enable it to transport oil from the oversupplied Cushing hub to U.S. Gulf Coast refiners. The Seaway pipeline could operate in reversed service with an initial capacity of 150 MBPD during the second quarter of 2012. Following pump station additions and other modifications, which are anticipated to be completed in the first quarter of 2013, we anticipate the capacity of the reversed Seaway pipeline will be up to 400 MBPD (assuming a mix of light and heavy grades of crude oil) which will later be looped to expand the capacity another 450 MBPD by 2014. In addition, we are constructing related storage assets at our ECHO terminal and connecting pipelines in the Houston, Texas area that are expected to be completed in mid-2012 and early 2014, respectively.

Crude oil pipelines
Description of Asset	Ownership Interest	Useable Storage Capacity (MMBbls)	Miles	Function
Seaway Crude Pipeline system	50% (1)	3.4	669	May 2012- transport crude from Cushing, OK and supplies crude oil to the Gulf Coast region.
Red River System	100%	1.2	2,002	Transports crude oil from North Texas to southern Oklahoma for delivery to two local refineries or pipeline interconnects for further transportation to Cushing, OK.
South Texas System	100%	1.1	1,346	Transports crude oil from an origination point in South Texas to the Houston area.
West Texas System	100%	0.4	614	Connects crude oil gathering systems in West Texas and southeast New Mexico to our terminal in Midland, TX.
Other (4 systems)	Various (2)	1.1	746
Total miles			5,254
Crude oil terminals
Description of Asset	Ownership Interest	Useable Storage Capacity (MMBbls)	Miles	Function
Cushing terminal	100%	3.1		Provides crude oil storage, pumpover and trade documentation services.
Midland terminal	100%	1.5		Provides crude oil storage, pumpover and trade documentation services.
Total capacity		11.8