Permian producers have enjoyed an abundance of outbound options since the pandemic, with egress capacity surpassing production. While a significant amount of capacity remains available, not all routes have proven equal in the eyes of the market, with Corpus Christi and Houston the most sought-after destinations for Permian crude. In today’s RBN blog, we’ll explore why ONEOK’s BridgeTex Pipeline is the only conduit serving the Houston market that still has room to take on additional volumes — although it appears to be quickly nearing full capacity.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Before diving into the details, it’s helpful to know the history of BridgeTex Pipeline ownership. BridgeTex, which came online in Q3 2014, was built by Magellan Midstream and Occidental Petroleum (Oxy), each holding a 50% stake. In 2014, Oxy sold its share to Plains All American for approximately $1.1 billion. (At that time, Magellan acquired BridgeTex’s tanks at the East Houston Terminal and the pipeline between East Houston and Texas City and integrated those assets with its existing crude oil system.) Four years later, in 2018, the Ontario Municipal Employees Retirement System (OMERS) — the defined benefit pension plan for municipal employees in Canada’s most populous province — acquired a 50% interest in the pipeline for around $1.4 billion, with Magellan maintaining a 30% interest and Plains with 20%. The transaction allowed Plains and Magellan to sell a portion of their pipeline at what seemed to be the top of the market, while OMERS was able to acquire a portion of a very attractive asset originating from the most lucrative production area in the U.S., providing strong cash flow for the foreseeable future. As covered in Tulsa Time, ONEOK acquired Magellan in 2023 in a transaction valued at $18.8 billion. This deal included numerous assets, among them Magellan’s Colorado City, TX, hub and its 30% interest in BridgeTex Pipeline.
When BridgeTex was originally marketed, and ultimately launched its open season, there were two types of commitments being contemplated: a regular committed shipper and a firm-space shipper. The key difference was that a regular committed shipper could have its volumes allocated down by other regular shippers but a firm-space shipper could not. Another important difference was that regular committed shippers enjoyed a rate lower than the walk-up tariff, while firm-space shippers were obligated to pay more.
BridgeTex came online at 300 Mb/d with a Colorado City origin and destinations in Houston and Texas City. The pipeline had both a Federal Energy Regulatory Commission (FERC) tariff for those customers making an interstate movement (i.e., crude oil originating in New Mexico) and a Texas Railroad Commission (RRC) tariff for those customers making an intrastate movement. In 2017, BridgeTex created a new origin point at Bryan, TX, in the middle of the Eaglebine production area (about 100 miles northwest of Houston). Then, in 2017, due to continued growth in the Permian Basin, BridgeTex expanded again to an ultimate capacity of 440 Mb/d. In addition to the added capacity, BridgeTex offered a new origin of Midland (via a lease from Plains). This expansion was done under a new tariff structure, with that capacity managed separately from the original BridgeTex space. As such, BridgeTex II was born.
Figure 1. BridgeTex Pipeline Connectivity. Source: RBN
Join Backstage Pass to Read Full Article
About the song
“Last Man Standing” was written by Bruce Springsteen and appears as the fifth song on Bruce Springsteen’s 20th studio album, Letter to You. The song reminisces about Springsteen’s days in his mid-sixties band, The Castiles, along with his former bandmate in the group, George Theiss (to whom Springsteen dedicated the song). After Theiss died in 2018, it left Springsteen as the sole surviving member of The Castiles, and “the last man standing” from the group. The song has become a live staple of Springsteen’s live shows, performed solo by Springsteen with an acoustic guitar. Personnel on the record were: Bruce Springsteen (vocal, guitar), Roy Bittan (piano), Nils Lofgren, Steve Van Zandt (guitar), Garry Tallent (bass), Max Weinberg (drums), Charles Giordana (organ), and Jake Clemons (saxophone).
Letter to You was recorded in November 2019 at Thrill Hill Recording in Colts Neck, NJ, and produced by Ron Aniello and Bruce Springsteen. The album features Springsteen and the E Street Band playing live in a room at the same time, with very few overdubs, at Springsteen’s home studio in New Jersey. Released in October 2020, the album went to #1 on the Billboard 200 Album charts. Four singles were released from the LP.
Bruce Springsteen is an American singer, songwriter and guitarist. Nicknamed “The Boss,” he has had a career that has spanned six decades. He has released 21 studio albums, 23 live albums, eight compilation albums, 88 soundtrack albums, seven EPs, and 77 singles. He has sold over 150 million records worldwide, He has won an Academy Award, two Golden Globes, 20 Grammy Awards, and is a member of the Rock and Roll Hall of Fame and Songwriters Hall of Fame, He has received Kennedy Center Honors, the National Medal of Arts, the Woody Guthrie Prize, and the Presidential Medal of Freedom. He continues to record and tour and will be playing eight concerts in Canada in November 2024, with a European tour commencing in May 2025.
