CME Group to Develop New Gulf Coast Crude Oil Futures Contract at Enterprise Terminal

News provided by

Dec 07, 2011, 01:46 ET

NEW YORK and CHICAGO, Dec. 7, 2011 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced it will work with oil market participants to discuss developing a new Gulf Coast crude oil futures contract at the ECHO Terminal, a storage facility being developed by Enterprise Products Partners L.P., to be listed on the NYMEX exchange. Connected to multiple facilities along the Houston Ship Channel, the ECHO Terminal is expected to begin service during the second quarter of 2012. The ECHO Terminal will be the destination of Enterprise's Eagle Ford Crude pipeline, as well as the Seaway pipeline following the reversal project announced November 16, 2011 by Enbridge Inc. and Enterprise. Once the process of changing the flow direction has been completed, Seaway will transport crude from Cushing, Oklahoma to the Houston refining market. The Seaway pipeline will accommodate growing domestic crude oil production supplies from the Cushing hub and Canada.

"The recent announcement to reverse the Seaway pipeline represents a major development for the North American crude oil market, and will be an important logistical solution for the vital Cushing marketplace," said Bryan Durkin, chief operating officer and managing director, products & services at CME Group. "We believe this new project will make the NYMEX Light Sweet Crude Oil (WTI) benchmark more accessible to global markets, bringing 150,000 barrels a day to the Gulf from Cushing by the second quarter of 2012 and approximately 400,000 barrels a day by 2013. This is a significant milestone, and we look forward to working with our oil industry customers to explore the development of a new physically-delivered crude oil futures contract at Enterprise's ECHO terminal."

Michael A. Creel, president and chief executive officer of Enterprise's general partner, stated, "As part of our integrated network of midstream assets, the ECHO Terminal provides an important delivery point for domestic crude oil production from conventional areas, as well as the growing shale plays. We look forward to working with CME Group as it develops a new Gulf Coast crude oil contract that helps the global energy market manage risk more effectively."

CME Group will consider developing a new contract with similar quality specifications as the current NYMEX WTI contract traded at Cushing to be listed on the NYMEX exchange. Other crude oil contracts could be added for physical delivery at ECHO as market demand warrants. Through the ECHO Terminal, shippers will have access to the major refineries in Texas City, Pasadena/Deer Park, Baytown and others along the Houston Ship Channel. Altogether, these facilities represent more than 2 million barrels per day of refining capacity. Engineering work is now under way for an extension of Seaway from the ECHO Terminal to Port Arthur, Texas, which features heavy crude oil refining capabilities.

About Enterprise Products Partners L.P.

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. EPD's assets include approximately: 50,000 miles of onshore and offshore pipelines; 192 million barrels of storage capacity for NGLs, refined products and crude oil; and 27 billion cubic feet of natural gas storage capacity. Services include: natural gas transportation, gathering, processing and storage; NGL fractionation, transportation, storage, and import and export terminaling; crude oil and refined products storage, transportation and terminaling; offshore production platform; petrochemical transportation and storage; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico. For additional information about Enterprise please visit www.enterpriseproducts.com.

About CME Group

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort®. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise and CME Group expect, believe or anticipate will or may occur in the future, including anticipated benefits and other aspects of such activities, events, developments or transactions, are forward-looking statements. Although Enterprise and CME Group believe that the forward-looking statements included herein are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition and other risks and uncertainties included in the reports filed with the Securities and Exchange Commission by Enterprise and CME Group, respectively. While Enterprise and CME Group make these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those expected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, neither Enterprise nor CME Group intends to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

CME-G

SOURCE CME Group