Plains All American has an extraordinary collection of crude oil gathering systems and shuttle pipelines in the Permian Basin, as well as full or partial ownership interest in a number of long-haul takeaway pipelines to the Gulf Coast and the Cushing hub. As important as many of these individual systems and pipelines may be, it’s the interconnectivity among these assets — and especially Plains’ crude oil terminals in Midland and other West Texas locales — that gives the midstream giant’s Permian infrastructure a value far greater than the sum of its parts. Today, we’ll discuss the important role that Plains’ two terminals in Crane, TX, play in balancing the midstream company’s Permian crude oil delivery network and providing destination optionality.
So far in this series, we have been looking at how storage and distribution hubs in the Permian help to choreograph the transportation of crude oil to end-users and enable traders and others to take advantage of commercial opportunities. In Part 1, we said that Permian infrastructure development has been on a tear the past few years, driven by the once commonly held view that crude oil production there (and production of natural gas and NGLs) was going to rise steadily and substantially through at least the mid-2020s. Crude oil takeaway capacity from the Permian has nearly tripled in the last five years to about 7 MMb/d today and will be closer to 8 MMb/d when the Wink-to-Webster pipeline is fully online. Over the same period, crude oil storage capacity at the seven largest hubs within the Permian has doubled to about 34 MMbbl, with another 4 MMbbl or so in various stages of development and construction. (At least another few million barrels of storage capacity is scattered across the Permian at other smaller sites.)
RBN’s US Gulf Coast Crude Oil Infrastructure Map - is up-to-date and provides a clear and comprehensive view into North America’s most dynamic and important crude oil market landscape.
With our forecast that Permian production — now at 4.5 MMb/d — won’t surpass 5 MMb/d until 2022 at the earliest, the hydrocarbon play appears to have more than enough takeaway capacity. Still, we wonder whether there’s sufficient in-region storage capacity in place, given the need for (1) operational storage to manage inbound and outbound pipeline flows, (2) storage space for commercial purposes such as taking advantage of blending opportunities or price fluctuations (such as contango markets), and (3) space to provide the “capacity cushion” that users of operational storage like to build into their calculations — just in case.
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About the song
"Wide Open Spaces" was written by Susan Gibson. It appears as the second song on side one of The Dixie Chicks’s (now called The Chicks) fourth studio album of the same name. Released as the third single from the LP in August 1998, the song went to #1 on the Billboard Hot Country Songs chart and #41 on the Billboard Hot 100 Singles chart. The song won the Country Music Association's award for Single of the Year and Music Video of the Year in 1999. Personnel on the record were: Natalie Maines (vocals), Emily Erwin (acoustic guitar, banjo, dobro, vocals), Martie Seidel (fiddle, mandolin, vocals), and various session musicians.
The album Wide Open Spaces was recorded between March and August 1997, with Blake Chancey and Paul Worley producing. Released in January 1998, it went to #1 on the Billboard Top Country Albums chart and #4 on the Billboard Top 200 Albums chart. It won two Grammy Awards in 1999, has been certified 13x Platinum, and given Diamond status by the Recording Industry Association of America. Five singles were released from the LP.
The Chicks (previously known as The Dixie Chicks) are an American country music group formed in Dallas in 1989 by sisters Martie and Emily Erwin. Martie (now Martie Maguire) and Emily (now Emily Strayer) brought Natalie Maines into the band as the lead singer in 1995. In June 2020, the band changed its name to The Chicks. They have released eight studio albums, two live albums, and 25 singles, and have sold more than 33 million records worldwide. Five members have passed through the ranks of The Chicks since their formation. They continue to record and tour.
