Oil Production in the Permian Basin is Outgrowing Pipelines | Russell T. Rudy Energy LLC
“Rigzone” reports that as a result of the shale revolution, oil production from the Permian Basin of West Texas and Southeast New Mexico is outstripping the pipelines’ ability to transport it to Gulf Coast refineries. Shale oil production in the Permian is projected to increase for the sixth straight month in September according to the U. S. Energy Information Administration.
Permian Basin crude production is growing faster than any other region in the U. S., but pipeline capacity is not keeping pace, at least in the short term. Oil production is scheduled to reach 1.72 million barrels per day (bpd) in September, an increase of 38,000 bpd over August. To put this in perspective, the South Texas Eagle Ford shale’s output will rise by 31,000 bpd during the same period to 1.51 bpd, and North Dakota’s Bakken shale is expected to reach1.14 million bpd, an increase of 20,000 bpd.
Fortunately, two pipeline projects are underway which should help alleviate the transportation bottleneck. The Magellan Midstream Partners LP BridgeTex pipeline will add 300,000 bpd of capacity when it comes on stream at the end of September. BridgeTex will transport crude from Colorado City to the Houston area.
Sunoco Logistics Partners LP is constructing the Permian Express II pipeline from Colorado City to the Gulf Coast and is scheduled for full service in the second quarter of 2015.
To read the article in its entirety, please go to www.rigzone.com/news/oil_gas/a/134497/ .
