Crude oil production growth in the Permian could speed up after the expansion of the BridgeTex Pipeline, the Federal Reserve Bank of Dallas said. The pipeline’s capacity was raised by 100,000 bpd to 400,000 bpd in the second quarter of the year. The BridgeTex pipeline system currently carries Permian crude oil from Colorado City, Texas, to the Houston Gulf Coast area.
The Permian is already the fastest-growing oil-producing region in the U.S., instrumental in driving the total national output to over 9.5 million bpd, as of the latest EIA weekly petroleum report. The pipeline, operated by Magellan Midstream Partners and Plans All American, connects the play to the Houston area, which IHS Market analysts forecast will be the main destination for most of the new production that comes on stream in the star play.
From there, the oil will likely be exported as global demand is stronger than local, with daily U.S. exports seen by IHS Market analysts growing to 3 million barrels over the next eight years and Permian oil accounting for most of that amount.
At the moment, the Permian is yielding around 2.5 million barrels of oil daily and the play is also a hot spot for new pipelines. Total capacity in this segment could reach almost 5 million bpd by 2020, while production could expand to 4 million bpd if international prices increase to $60 a barrel.
Deals, Mergers & Acquisitions
• French Total announced this week the acquisition of Maersk…