August 8, 2019 – Reuters
New U.S. pipelines poised to start price war for shale shippers
By Collin Eaton
HOUSTON, Aug 8 (Reuters) - The operators of two new pipelines in West Texas shale fields are offering discounted prices to attract shippers accustomed to high fees to move oil to export hubs, according to the pipeline companies and federal filings.
These bargain rates, in one case half the initial published rate, will aid strapped oil producers that once had to sell their oil for about $10 less per barrel because of transport constraints to move their oil from the largest shale oil field in the country.
But pipeline companies, which have in the past year raced to add new capacity to flow oil from the Permian Basin to the refining and export hub on U.S. Gulf Coast, will face pressure to cut rates in coming weeks, said oil traders and analysts…
Read the full article here: https://www.reuters.com/article/usa-permian-pipeline/new-u-s-pipelines-poised-to-start-price-war-for-shale-shippers-idUSL2N2521TX
… Spot rates on Enterprise’s Midland-to-ECHO line, which transports 575,000 bpd of crude from Midland to the Houston area, average above $7 a barrel, filings showed. It did not respond to requests for comment.
“Pipelines are going to have to charge lower and lower fees,” said John Zanner, an analyst at consultancy RBN Energy. “You’re going to see them really narrow their margins in order to attract those barrels.”
