Last week, Enterprise Products Partners (NYSE:EPD), the largest publicly traded midstream company in the U.S., announced that it will expand a major crude oil storage terminal in Houston as part of its strategy to boost infrastructure in the Southeast Texas refinery market.

The expansion will include an additional 4 million barrels of crude storage capacity at Enterprise's ECHO terminal on the Houston Ship Channel, as well as about 55 miles of pipeline to link the terminal with refining facilities in the Southeast Texas refinery market.

The region's refineries have traditionally relied on waterborne imports of crude oil. But with the rapid growth in North American crude oil production, led by plays such as the Eagle Ford, the Permian Basin, the Bakken, and Alberta's oil sands, large volumes of crude oil are flowing into Southeast Texas and gradually displacing waterborne imports.

With production from these plays expected to increase further, the U.S. Gulf Coast will continue to receive growing volumes of crude oil and will therefore require additional storage and distribution facilities like Enterprise's ECHO terminal.

Other leading midstream companies, such as Kinder Morgan Energy Partners (NYSE:KMI), Plains All American (NYSE:PAA), and Sunoco Logistics Partners – now a part of Energy Transfer Partners (NYSE:ETP) – are also working on boosting storage and distribution capacity along the Gulf Coast to handle the influx of crude oil.  

Enterprise's Chief Operating Office A.J. "Jim" Teague expressed optimism about the expansion project, citing strong customer interest in the expansion of storage and distribution facilities in the region.

"We believe ECHO will become the critical link between the new pipelines bringing supplies from the producing basins and the end use refining market in Southeast Texas as it is located at the crossroads of crude oil moving from north to south and from west to east," he said.

Enterprise's ECHO expansion project will be carried out in phases and is slated for completion in the fourth quarter of 2014. ECHO will also have access to Enterprise's marine terminal at Morgan's Point on the Houston Ship Channel.