As crude oil production continues to ramp up in the Permian, producers in the red-hot play are faced with difficult choices among pipeline takeaway capacity alternatives. Some pipes are express lines that move barrels from the Permian to a single market, while others offer destination optionality, thereby providing access to multiple regional markets. As values across the Permian, U.S. oil hubs, and the global crude landscape continue to shift, such destination optionality is becoming increasingly important to producers to help ensure they are getting the highest possible price for their product.
Over the past few years, new regional networks of pipes have been built to gather and shuttle crude to takeaway pipelines as crude oil production accelerates in the Delaware and other high-growth parts of the Permian. In many cases, these pipelines are designed to provide that all-important destination optionality. This report details many of the gathering systems and shuttle pipelines systems providing this capability to the Permian market.
Key take-aways from the report include:
- Destination optionality is becoming increasingly important to Permian producers to help ensure they are getting the highest possible price for their product.
- New regional networks of pipes are being developed to gather and shuttle crude to takeaway pipelines. In many cases, these systems are designed to give producers and other shippers access to two or more takeaway pipes.
- Eleven new shuttle and hybrid systems totaling approximately 1.9 MMb/d of new Permian capacity are either already flowing or are in development. Most of these systems have the capacity for further expansion.
- Another seven Permian gathering systems either have recently come online or are expected to start up soon.
- As crude oil connectivity across the Permian continues to improve, trading locations in the basin will gain in importance as both transactional hubs and pricing benchmarks.
Hot Legs! Crude Oil Shuttle Pipelines and Gathering Systems in the Permian is included in RBN Energy’s 2017 Drill Down report series, a suite of reports covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids. Drill Down reports are part of RBN Backstage Pass™ premium resources that also include Blog Archive Access, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. By subscribing to RBN’s Backstage Pass™ Premium Services, you plug into our network and get direct access to our premium resources.