financetom
Business
financetom
/
Business
/
New Permian oil pipelines unlikely to be built, say top operators
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
New Permian oil pipelines unlikely to be built, say top operators
Nov 3, 2024 11:21 AM

By Arathy Somasekhar

HOUSTON (Reuters) -Top executives of two U.S. energy pipeline operators on Thursday ruled out building new crude oil lines to move volumes out of the Permian shale field in West Texas because of tepid volume growth and difficulties constructing new lines.

A wave of consolidation in the top U.S. shale field has concentrated output in the hands of companies that are promising to restrain output so as not to crash prices by over-producing. Pipeline firms also have embraced acquisitions over new construction.

Enterprise Products Partners co-CEO Jim Teague said at a Houston energy conference his firm is not considering a new oil pipeline out of West Texas. The CEO of rival operator Plains All American Pipeline said at the same event companies are more likely to optimize existing rather than build new lines.

Enbridge will add up to 120,000 barrels per day (bpd) to its Gray Oak oil pipeline by 2026, an example of expanding capacity on an existing pipeline. Enterprise has said it could convert a natural gas liquids pipeline to carry crude.

Shale pipeline operator EPIC Consolidated Operations is weighing expanding a Permian to south Texas line by about 300,000 bpd.

The expansion is a "when, not an if," said EPIC CEO Brian Freed.

PRICE NO LONGER INCENTIVIZES DRILLERS

The executives said Permian shale producers are not likely to return to their era of fast-growth that prompted the construction of new oil lines last decade.

Drillers remain disciplined in their spending for new volumes and do not look to drill and grow production even if prices jump from current levels, Chiang added.

"A range of roughly of $60 to $90 (per barrel) doesn't change their plans too much," he said.

Output from the Permian basin in the next few years could rise about 300,000 bpd, he said, largely in line with the latest government estimate.

"Most of the producers out of the Permian, because of the consolidation, are taking a more measured pace," EPIC's Freed said.

DEEPWATER EXPORT PROJECTS LAG

Enterprise' Teague also said that his company continues to advance its proposed deepwater oil export project, Sea Port Oil Terminal (SPOT), but "nobody wants to be (the) first" customer to sign up.

Multi-year regulatory delays, a loss of commercial backers and slowing U.S. shale oil production growth has SPOT and three rival offshore oil-export projects struggling.

A change in crude flows as many Western nations banned imports of Russian crude after the country's invasion of Ukraine, pushing Russian oil to flow to Asia, also has undercut the outlook for U.S. deepwater export projects that can load supertanker directly.

"Things have changed, but my gut feeling is that we'll be able to get SPOT across the finish line," Teague said while speaking at an RBN Energy conference in Houston.

However, Plain's Chiang said "the jury is out on SPOT," saying it while it makes a lot of sense on paper, existing export contracts and systems could limit availability of customers.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Cargurus Insider Sold Shares Worth $486,376, According to a Recent SEC Filing
Cargurus Insider Sold Shares Worth $486,376, According to a Recent SEC Filing
Aug 22, 2024
04:11 PM EDT, 08/21/2024 (MT Newswires) -- Dafna Sarnoff, Chief Marketing Officer, on August 19, 2024, sold 17,278 shares in Cargurus ( CARG ) for $486,376. Following the Form 4 filing with the SEC, Sarnoff has control over a total of 133,466 shares of the company, with 133,466 shares held directly. SEC Filing: https://www.sec.gov/Archives/edgar/data/1494259/000112760224022697/xslF345X05/form4.xml ...
Paycom Software Insider Sold Shares Worth $616,183, According to a Recent SEC Filing
Paycom Software Insider Sold Shares Worth $616,183, According to a Recent SEC Filing
Aug 22, 2024
04:21 PM EDT, 08/21/2024 (MT Newswires) -- Chad R. Richison, 10% Owner, Director, CEO, President and Chairman, on August 20, 2024, sold 3,900 shares in Paycom Software ( PAYC ) for $616,183. Following the Form 4 filing with the SEC, Richison has control over a total of 6,530,541 shares of the company, with 2,967,158 shares held directly and 3,563,383 controlled...
--Zoom Video Communications Reports 3,933 Customers Contributing More Than $100,000 in Q2 vs Visible Alpha Analyst Consensus of 4,106
--Zoom Video Communications Reports 3,933 Customers Contributing More Than $100,000 in Q2 vs Visible Alpha Analyst Consensus of 4,106
Aug 22, 2024
04:18 PM EDT, 08/21/2024 (MT Newswires) -- Price: 62.29, Change: +2.06, Percent Change: +3.42 ...
Snowflake raises annual product revenue forecast
Snowflake raises annual product revenue forecast
Aug 22, 2024
Aug 21 (Reuters) - Data cloud analytics firm Snowflake raised its forecast for full-year product revenue on Wednesday, as it attracts more clients to its cloud platform owing to advancements in artificial intelligence. The company now expects product revenue of $3.36 billion for fiscal 2025, compared with its prior forecast of $3.30 billion. ...
Copyright 2023-2026 - www.financetom.com All Rights Reserved