More Texas Pipelines Needed

Texas Pipeline Map: Provided by Energy Information Administration

Texas Pipeline Map: Provided by Energy Information Administration

Over the last year, production in the Permian Basis has outstripped the Eagle Ford Shale and drillers who are flocking to the region may soon need additional pipeline capacity to move their product.

Related: Eagle Ford Oil Production to Rise While Gas Decreases

While crude prices have taken a toll on shale producers in most regions, Permian production has spiked over the past two year. In the Eagle Ford, oil production in the Eagle Ford peaked in March 2015 at 1.7 million barrels per day (mb/d), but has since fallen to just 1.1 mb/d today. In the Permian, production has risen by nearly 0.5 mb/d to nearly 2.3 mb/d.

Bloomberg estimates that Permian production could continue to rise to 2.65 mb/d by the end of the year, which is greater than the current pipeline capacity that can carry 2.54 mb/d.

From the looks of it there could be several thousand barrels a day worth of midstream capacity shortages by the end of the year. The rate of growth in takeaway pipeline capacity is going to be where the bottleneck is, and that will choke access to the market for producers.”
— Mara Roberts, analyst at BMI Research

Several pipelines projects are on the horizon to help ease the burden.

  • Enterprise Products Partners has a pipeline under construction, which will add 450,000 bpd by next year. 
  • The 468-mile Pecos Trail Pipeline, an intrastate natural gas system that will span from West Texas all the way down to Corpus Christi, Texas. The system will be able to transport 1.85 billion cubic feet per day. 
  • The proposed EPIC pipeline will move 440,000 barrel a day from the Delaware and Midland basins in West Texas to Corpus Christi, Texas. 

Texas pipeline facts (EIA):

  • Texas is the top ranked natural gas consuming State.
  • Intrastate pipelines in Texas account for 45,000 of the 58,600 miles of natural gas pipelines in the State.
  • The largest intrastate pipelines in Texas are Enterprise Texas Pipeline Company (8,750 miles) and the Energy Transfer Partners LP (8,800 miles).
  • The intrastate network in Texas has experienced significant growth over the past several years as a result of increased demand for pipeline capacity caused by the rapid development and expansion of natural gas production in the Barnett Shale Formation.
  • New pipelines have been built, and expansions to existing ones undertaken, to meet increased demand.