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Project(s): View 5 related projects in PECWeb
Plant(s): View 4 related plants in PECWeb
Released December 27, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Crude oil midstream is a demand-sensitive business. Pipelines do not get built unless there is demand, whether it is from suppliers looking to move product, or refiners looking to get product less expensively. However, refiners can only handle so much crude, and producers can only pull out so much at a time, meaning pipeline projects linking the two must not only provide significant value to one or the other to warrant construction, but also beat their competitors to completion in order to claim that market share.
Industrial Info is tracking eight different projects that will provide takeaway capacity to the Permian Basin. Most of these projects have been announced in the past year and have not secured full funding, let alone started construction. While more than one may see completion, which one(s) will it be?
Since May 2016, the Permian Basin has seen a steady growth in production, up from 1.9 million barrels per day (BBL/d) to nearly 2.8 million BBL/d. The Permian Basin has roughly 2.0 million BBL/d of pipeline takeaway capacity. While the basin does have some local refining capability, production outweighs takeaway by a significant margin. It is significant enough that many development projects have been announced to carry Permian crude oil to market. Major players such as Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma), Phillips 66 (NYSE:PSX) (Houston, Texas), Buckeye Partners, L.P. (NYSE:BPL) (Houston) and Enterprise Products Partners LP (NYSE:EPD) (Houston) have each announced and/or begun open seasons on new pipeline capacity projects. Magellan's 350,000-BBL/d Permian-to-Corpus/Houston pipeline, Phillips 66's' joint-venture project, the 385,000-BBL/d Gray Oak pipeline, Enterprise Products' preliminary concept to repurpose existing natural gas liquids (NGL) lines out of the region to transport as much as 200,000 BBL/d, and Buckeye's up-to-600,000-BBL/d South Texas Gateway pipeline are massive projects by big names.
Smaller, newer players have also thrown their hats in the ring, as is common when demand is high and the race to the finish is on. One such player, EPIC (San Antonio, Texas, is planning two massive pipelines out of the Permian, one of which is for 590,000 BBL/d of crude oil transmission, and the other for NGL.
The completion dates for these projects fall in or around 2019, and all have similar scopes. For the most part, they follow a similar route out of the Permian Basin, diverging in the Eagle Ford area to service diverse markets. Right now, it's a challenge of who will get enough interest, funding and permission to build first. With a combined takeaway capacity of well over two million BBL/d across all the newly announced projects, not all will be necessary to meet the demands of shippers and refiners, so only time will tell which of these projects gets voted off the proverbial island.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
Industrial Info is tracking eight different projects that will provide takeaway capacity to the Permian Basin. Most of these projects have been announced in the past year and have not secured full funding, let alone started construction. While more than one may see completion, which one(s) will it be?
Since May 2016, the Permian Basin has seen a steady growth in production, up from 1.9 million barrels per day (BBL/d) to nearly 2.8 million BBL/d. The Permian Basin has roughly 2.0 million BBL/d of pipeline takeaway capacity. While the basin does have some local refining capability, production outweighs takeaway by a significant margin. It is significant enough that many development projects have been announced to carry Permian crude oil to market. Major players such as Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma), Phillips 66 (NYSE:PSX) (Houston, Texas), Buckeye Partners, L.P. (NYSE:BPL) (Houston) and Enterprise Products Partners LP (NYSE:EPD) (Houston) have each announced and/or begun open seasons on new pipeline capacity projects. Magellan's 350,000-BBL/d Permian-to-Corpus/Houston pipeline, Phillips 66's' joint-venture project, the 385,000-BBL/d Gray Oak pipeline, Enterprise Products' preliminary concept to repurpose existing natural gas liquids (NGL) lines out of the region to transport as much as 200,000 BBL/d, and Buckeye's up-to-600,000-BBL/d South Texas Gateway pipeline are massive projects by big names.
Smaller, newer players have also thrown their hats in the ring, as is common when demand is high and the race to the finish is on. One such player, EPIC (San Antonio, Texas, is planning two massive pipelines out of the Permian, one of which is for 590,000 BBL/d of crude oil transmission, and the other for NGL.
The completion dates for these projects fall in or around 2019, and all have similar scopes. For the most part, they follow a similar route out of the Permian Basin, diverging in the Eagle Ford area to service diverse markets. Right now, it's a challenge of who will get enough interest, funding and permission to build first. With a combined takeaway capacity of well over two million BBL/d across all the newly announced projects, not all will be necessary to meet the demands of shippers and refiners, so only time will tell which of these projects gets voted off the proverbial island.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
