Frontier Energy Services

While crude oil takeaway capacity out of the Permian Basin from major hubs is probably overbuilt for the time being that is not the case for gathering systems bringing barrels from the wellhead to mainline terminals. Production in the Permian has slowed since the drop in oil prices reduced drilling activity but is still increasing from sweet spots in the Midland and Delaware basins in West Texas where pipeline gathering can save producers as much as $2/Bbl in trucking fees. Today we continue our review of gathering infrastructure build out to deliver more crude to takeaway hubs in the Permian.

Permian crude production is up over 1.5 MMb/d today and headed to 1.7 MMb/d by the end of 2014. Current hot spots include the Bone Spring, Avalon and Wolfcamp horizontal shale plays in the northern Delaware Basin located in Northwest Texas and Southeast New Mexico. Today we look at new and proposed gathering systems in the Delaware Basin that will transport over 200 Mb/d of crude from truck terminals to regional pipelines, rail hubs and refineries.