Pipeline bottleneck looms for Permian crude oil

Growing crude oil production in the Permian Basin of West Texas and southeast New Mexico will likely create a pipeline bottleneck in coming years, Kallanish Energy reports.

That assessment came last week from midstream speakers at the Argus Americas Crude Summit in Houston.

There is sufficient pipeline capacity at the moment in the still-growing Permian Basin, but there is “going to be a day of reckoning,” said Brent Secrest of Enterprise Products Partners.

The bottleneck is likely to begin in late 2019 or early 2020, said Magellan spokesman Robert Barnes. “You’re going to run into another wait for infrastructure capacity,” he said in a report by Argus Media.

Many midstream companies serving the Permian have built pipelines or have plans to develop new lines to move crude to the Gulf Coast for export.

Other players considering new pipeline projects include Plains All American and Buckeye Partners.

Magellan said it is conducting preliminary engineering work on a possible oil export terminal off the coast of Texas to accommodate Very Large Crude Carriers (VLCCs).

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