July 9, 2018 – Bloomberg
Permian pinch spurs pipeline binge, and fears of overbuild
By: Rachel Adams-Heard
The pipeline crunch threatening the world’s hottest shale play won’t be solved until at least the back half of next year. But then, the floodgates will open.
Pipelines serving the Permian Basin in Texas and New Mexico were able to carry 2.9 million barrels of oil a day in the second quarter, according to analysts at Bloomberg NEF, and pretty much every line from Midland to the Gulf Coast is full. That’ll change in late 2019 as three major projects are slated to open, potentially adding more than 2 million barrels a day of capacity…
Read the full article here: https://www.bloomberg.com/news/articles/2018-07-09/permian-pinch-spurs-pipeline-binge-and-fears-of-overbuilding
…Pipeline Timelines
Plains may not be the only one facing pressure. The chances for setbacks are “increasing by the day,” said Robert W Baird & Co. analyst Ethan Bellamy.
“If you’re starting to build three or four of these pipelines out of the Permian at the same time, there’s a potential to max out the available construction capacity,” he said. “If there are delays, they’re probably due to construction capacity and labor and acquisition of pipeline in a timely and cost-efficient manner.”
Still, by early 2020, drillers may have more ability to move oil out of the Permian than they really need, said John Zanner, an RBN Energy analyst. While good for producers that benefit from cheaper shipping, that also could force companies to scrap some plans, he said.
Others say the play is up to the challenge.
