Basin

It’s been nine months since Plains All American’s Sunrise II crude oil pipeline started service out of the Permian to the Wichita Falls, TX, crude hub. In that time, it has transformed the balance of supply versus downstream takeaway capacity at Wichita Falls and become a critical conduit of Permian crude to the Cushing and Gulf Coast markets. What’s more, Plains is planning to build the Red Oak Pipeline from Cushing through Wichita Falls to the Gulf Coast in 2021, which will further solidify Sunrise II as an important outlet for Permian oil for some time. With two other new long-haul Permian crude pipelines — EPIC and Cactus II — days away from starting interim service to the Gulf Coast, an analysis of Sunrise II’s impacts thus far provides some clues as to how future expansions will reshape the region. Today, we discuss how Plains’ Sunrise II project has affected crude oil flows from the Permian to Wichita Falls, and from there to Cushing and the Gulf Coast, as well as what its role will be when Red Oak comes online.

Permian Basin crude producers are currently churning out over 1.5 MMb/d of crude from a basin that has produced oil since the 1920’s but is the center of a recent renaissance. With new production comes new demand for takeaway capacity and between January 2013 and the end of 2015, about 1 million barrels of new pipeline has been constructed or will come online directed towards Houston, Nederland and Corpus Christi, TX. About a dozen new gathering systems are being constructed to help get new production from the wellhead to the larger takeaway pipelines. Today we continue our series on new Permian gathering infrastructure.