November 8, 2018 – Natural Gas Intelligence
Severe ‘Takeaway Capacity Disorder’ Striking Permian, Says RBN Chief
By Carolyn Davis
The plethora of natural gas and oil supply clogging the Permian Basin has caused “severe cases of TCD, takeaway capacity disorder” that is going to take more than a few months to cure, according to RBN Energy LLC’s Rusty Braziel.
“For those of you not familiar with this affliction, it’s caused by too much of a good thing -- more production volume than pipeline capacity to get those barrels, or those cubic feet to market,” Braziel told a standing-room-only audience last month at RBN’s inaugural PermiCon event in Houston. “The symptom of the disease is always the same: wide price discounts compared to major hub locations like Cushing and Henry.”
The cure is always the same too, he said. The feverish buildup of oil, natural gas and natural gas liquids (NGL) could use a shot in the arm from more infrastructure.
“The good news is that the recovery rate is almost 100%,” Braziel said. “Build the infrastructure and the market corrects itself.”
Symptoms could linger, though, and are likely to incapacitate operators working in the massive play off and on for years.
“The larger issue is selecting the right treatment,” i.e. the necessary pipeline, gathering system and processing plant, Braziel said. “Get it right, and you are cured. Get it wrong? Well, you don’t want to get it wrong.”
Read the full article here: https://www.naturalgasintel.com/articles/116414-severe-takeaway-capacity-disorder-striking-permian-says-rbn-chief
