Permian Pinch Spurs a Pipeline Binge, and Fears of Overbuild - Bloomberg:
The pipeline crunch threatening the world’s hottest shale play won’t be solved until at least the back half of next year. But then, the floodgates will open.
Pipelines serving the Permian Basin in Texas and New Mexico were able to carry 2.9 million barrels of oil a day in the second quarter, according to analysts at Bloomberg NEF, and pretty much every line from Midland to the Gulf Coast is full. That’ll change in late 2019 as three major projects are slated to open, potentially adding more than 2 million barrels a day of capacity.
Fixing the pipeline conundrum is key for a shale play where researcher IHS Markit expects output to more than double by 2023 to 5.4 million barrels a day, eclipsing every OPEC nation beyond Saudi Arabia. Pipeline builders are pouring billions of dollars into the basin, but delays are a concern as developers compete for everything from labor to steel.
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