Available oil capacity for transporting crude oil from the Permian Basin to the U.S. Gulf Coast is tightening but it seems unlikely that a new crude oil pipeline will be built, despite the rising demand.

At our recent NACON-PADD 3 conference, executives from Plains and Enterprise said they would be unlikely to build a new greenfield pipeline in the near to medium term. New construction is increasingly challenging these days for a few reasons:

  1. Regulatory hurdles
  2. Difficulty securing long-term commitments
  3. Supply chain delays and long lead time for materials

According to our Crude Oil Permian report, pipelines from the Permian to Corpus Christi (aqua green ares on graph below) have been operating near full utilization for some time. Now, utilization to Houston (royal blue) has risen substantially as much of the recent growth in Permian production is directed toward this hub. Currently, ONEOK’s BridgeTex pipeline is the only Permian-to-Houston pipeline with notable capacity to spare, while just 180 Mb/d of unused capacity flows to Nederland (orange).

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