Permian Crude System

With Permian crude oil production now topping 4 MMb/d — and likely to surpass 5 MMb/d in short order — producers in the play are working closely with midstream companies to help ensure there is sufficient capacity in place to efficiently transport their crude from the lease to larger shuttle systems, regional hubs and takeaway pipelines. Sometimes, gathering systems need to be built from scratch, but in most cases, it is more cost-effective to expand existing systems that are already connected to key infrastructure downstream. Today, we continue our series with a look at a big pipeline network that NuStar Energy acquired two-plus years ago and has been expanding and improving ever since.

Shuttle pipelines in the Permian provide high-volume, straight-shot links between crude oil gathering systems and multiple takeaway pipelines out of the play ­­— giving producers and shippers critically important destination optionality. Assuming the shuttles are well-positioned and tied to increasing production on one end and multiple takeaway pipes on the other, existing intra-basin shuttles are highly valued and being gobbled up by major midstream players. And to keep pace with Permian production growth, existing shuttle systems are being expanded and new ones are being planned. Today, we continue our review of key crude-related infrastructure in the nation’s hottest oil production region.