• 4 minutes Trump has changed into a World Leader
  • 7 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 8 minutes Indonesia Stands Up to China. Will Japan Help?
  • 10 minutes US Shale: Technology
  • 13 minutes Which emissions are worse?: Cows vs. Keystone Pipeline
  • 17 minutes Shale Oil Fiasco
  • 4 hours Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 12 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 2 hours Phase One trade deal, for China it is all about technology war
  • 5 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 9 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 11 hours Might be Time for NG Producers to Find New Career
  • 12 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 1 day Beijing Must Face Reality That Taiwan is Independent
  • 11 hours Wind Turbine Blades Not Recyclable
  • 7 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 10 hours Denmark gets 47% of its electricity from wind in 2019
Has Natural Gas Hit Rock Bottom?

Has Natural Gas Hit Rock Bottom?

Natural gas prices fell below…

China’s Cheap Electric Vehicles Could Disrupt Global Markets

China’s Cheap Electric Vehicles Could Disrupt Global Markets

China’s legion of electric vehicle…

WoodMac: Permian Will Need Extra Oil Pipelines To Cope With Surging Output

pipe

Despite the ongoing rush to build oil pipelines to carry crude from the Permian to the Gulf Coast and an overbuild in the short-term, the fastest-growing U.S. shale play will need additional pipeline capacity up to 500,000 bpd by the end of 2030 to ship soaring crude output to markets, Wood Mackenzie said in new research this week.

Midstream operators are set to add 4 million bpd of Permian-to-Gulf Coast pipeline capacity by the end of 2022, creating a moderate overbuild in takeaway capacity in the early 2020s, according to the energy consultancy.  

However, WoodMac believes that even after the current build-out is completed, the Permian will still need at least 300,000-500,000 bpd of crude takeaway capacity in the long-term, by 2030, and cited three reasons for its forecast.

First, WoodMac expects resilient Permian basin oil production to continue into the 2030s. Next, between 2021 and the middle of the 2030s, pipeline capacity will fill up on routes to export destinations. And third, the long-haul capacity out of the Permian will need a slight boost in the early 2030s, according to Wood Mackenzie.

Currently, “The rapid addition of pipeline capacity will result in two to three years of overbuild, before normal long-haul capacity supply and demand conditions begin to re-emerge,” the consultancy said.

“As production growth expands well into the 2030s, US Gulf Coast-bound pipeline capacity will tighten. By the mid-2030s, Permian-to-Gulf Coast pipeline utilisation will surpass 92% in the absence of further investment, necessitating pipeline expansions or greenfield capacity,” said John Coleman, principal analyst, North America crude markets at WoodMac.

Production outpaced pipeline takeaway capacity in the Permian in early 2018, which weighed heavily on the Midland oil prices compared to other U.S. benchmarks. Companies are currently rushing to complete and place into service more pipelines to relieve the bottlenecks, and some are converting pipelines from shipping natural gas liquids (NGL) to crude oil to further ease the takeaway capacity congestion.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage


Leave a comment
  • Bill Simpson on July 11 2019 said:
    Talk about lucky. Texas landowners who will sit back and count their millions in royalty checks. It must be nice. And the residents who will get a lot of cheap state services. How do other states compete against billions of dollars coming up out of the ground!

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play