December 29, 2017 – Reuters
Pipeline projects move ahead to tackle rising Texas shale output
By: Bryan Sims
HOUSTON (Reuters) - Several oil pipeline companies this month agreed to move ahead on multi-billion-dollar projects that would link Texas shale fields to Gulf Coast export hubs, offering new outlets for burgeoning output expected in 2018.
Crude production from two large Texas shale fields next year is expected to rise about 800,000 barrels per day, researcher East Daley Capital Advisors estimates. Most pipelines will not be finished until 2019, when analysts say existing lines from West Texas will be nearly full.
On Friday, crude prices at the Midland hub in West Texas were $60.66 a barrel, compared with $65.01 a barrel at East Houston. A wide spread encourages producers to sign long-term pipeline contracts to get higher prices.
“If you are a pipeline company, you need to do something now,” said John Zanner, an analyst at consultants RBN Energy LLC. “Pipes are filling up from Midland to the Gulf and how full they are for how long will have an impact on price.”