Reports related to this article:
Project(s): View 2 related projects in PECWeb
Plant(s): View 2 related plants in PECWeb
Released March 21, 2017 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--As oil prices begin to recover, hopeful exploration and production (E&P) companies are turning their attention to drilling. Production in the Permian Basin, the last of the North American basins to experience a drop in crude-oil production, has returned to its highs just more than 2 million barrels per day (BBL/d). If the rate of recovery remains constant, the currently well-served Permian Basin is likely to find itself in need of new pipeline takeaway capacity in the not-so-distant future.
With the reintroduction of crude-oil exporting, Houston is no longer the sole prime destination for crude oil, as Corpus Christi builds out its infrastructure for hydrocarbon exports. Texstar Midstream Logistics (San Antonio, Texas) has launched an open season for a new 200,000-BBL/d cross-Texas pipeline that would carry crude from major producing areas of the Permian Basin to Corpus Christi, in addition to picking up condensates from the Eagle Ford Shale. While exciting, this pipeline also faces competition from an earlier planned pipeline from Enterprise Products--or does it?
As mentioned earlier, Houston and its ship channel are no longer the only destinations for crude oil pipelines. With its proximity to the Eagle Ford Shale, less crowded market and new crude oil export capabilities, Corpus Christi has emerged as an alternative to send/sell crude oil from Texas plays. Texstar's aforementioned pipeline, dubbed the Epic Pipeline, capitalizes on Corpus' proximity to the Eagle Ford by handling crude from that play, while avoiding unnecessary competition from other producers and pipelines that travel to Houston from the Permian.
The Epic Pipeline has carved out its own niche. With its potential to more than double in size up to 440,000 BBL/d, it could ensure the Permian's access to takeaway capacity is well-supplied for years to come, while significantly impacting the competitiveness of U.S. crude oil in the export market.
Epic Pipeline's potential competitor is the 525,000-BBL/d Midland to Rancho/Sealy pipeline from Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas). This pipeline has been under consideration for years and will be ready to start construction later this year. At this capacity, Enterprise's project is capable of carrying roughly 25% of total Permian production from Midland to Enterprise's sprawling network of pipelines in the Houston area.
The size of the Midland to Rancho/Sealy pipeline could indicate that the Permian Basin would have no further need of takeaway capacity once it is complete. However, it is vital to consider the allure of options. Access to another market gives producers the option to sell their crude somewhere that has fewer competitors, which may be more attractive, potentially contributing to a lowering of transportation costs across the board.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
With the reintroduction of crude-oil exporting, Houston is no longer the sole prime destination for crude oil, as Corpus Christi builds out its infrastructure for hydrocarbon exports. Texstar Midstream Logistics (San Antonio, Texas) has launched an open season for a new 200,000-BBL/d cross-Texas pipeline that would carry crude from major producing areas of the Permian Basin to Corpus Christi, in addition to picking up condensates from the Eagle Ford Shale. While exciting, this pipeline also faces competition from an earlier planned pipeline from Enterprise Products--or does it?
As mentioned earlier, Houston and its ship channel are no longer the only destinations for crude oil pipelines. With its proximity to the Eagle Ford Shale, less crowded market and new crude oil export capabilities, Corpus Christi has emerged as an alternative to send/sell crude oil from Texas plays. Texstar's aforementioned pipeline, dubbed the Epic Pipeline, capitalizes on Corpus' proximity to the Eagle Ford by handling crude from that play, while avoiding unnecessary competition from other producers and pipelines that travel to Houston from the Permian.
The Epic Pipeline has carved out its own niche. With its potential to more than double in size up to 440,000 BBL/d, it could ensure the Permian's access to takeaway capacity is well-supplied for years to come, while significantly impacting the competitiveness of U.S. crude oil in the export market.
Epic Pipeline's potential competitor is the 525,000-BBL/d Midland to Rancho/Sealy pipeline from Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas). This pipeline has been under consideration for years and will be ready to start construction later this year. At this capacity, Enterprise's project is capable of carrying roughly 25% of total Permian production from Midland to Enterprise's sprawling network of pipelines in the Houston area.
The size of the Midland to Rancho/Sealy pipeline could indicate that the Permian Basin would have no further need of takeaway capacity once it is complete. However, it is vital to consider the allure of options. Access to another market gives producers the option to sell their crude somewhere that has fewer competitors, which may be more attractive, potentially contributing to a lowering of transportation costs across the board.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
