Over the past five years, the Corpus Christi area’s ability to refine or ship out crude oil has increased substantially, driven initially by rising production in the Eagle Ford play in South Texas — growth that has since subsided. Now, Corpus is preparing for a coming onslaught of crude from the red-hot Permian, whose producers see the coastal port as the preferred destination for their light crude and condensates. Today we continue a blog series on Corpus Christi’s crude-related infrastructure with a look at what’s already there and how storage and marine-terminal upgrades made over the past few years will be coming in handy.
As we said in Part 1, the Permian production area in West Texas and southeastern New Mexico defied the oil-price collapse that started nearly three years ago. Crude output in the 70,000-square-mile play continued rising through the downturn; it now tops 2.3 million barrels/day (MMb/d), and is likely to rise by at least another 1.4 MMb/d by 2022, perhaps a lot more — a testament to the region’s extraordinary, multistack hydrocarbon resource and producers’ ongoing ability to increase per-well productivity by drilling longer laterals and using more proppant (see Faster Horses and Wipe Out!).
The Permian’s forecasted production growth already is having a ripple effect on crude oil infrastructure, not just within the play, where new gathering pipelines, storage and other assets are being built and planned, but hundreds of miles away. In Will It Go Round in Circles, we noted that three takeaway pipeline projects currently under construction will provide 610 Mb/d of incremental capacity out of the Permian, and that six or more takeaway projects in various stages of pre-construction development would add far more. These current and prospective projects would move crude to one of three destinations: the storage and distribution hub in Cushing, OK; Houston, the refining and marine-terminal giant; and Corpus Christi, an important refining center in its own right and an increasingly popular send-off point for ships transporting Eagle Ford and Permian crude (and condensate) to ports in the U.S. and export markets.