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Corpus Christi and its O&G Infrastructure
06/07/2017
Permian’s Midstream Takeaway. Are we in for a problem any time soon? Who are the regional industry champions? Read some facts below. Today looking at Corpus Christi. See key facilities on a map above.
As the threat of too much oil and too few pipelines in the Permian Basin continues to loom, midstream developers are trying to keep up with the aggressive pace of producers with some looking toward growing export opportunities on the Texas Gulf Coast.
Magellan is one of several companies looking to lay a new pipeline from the Permian to Corpus Christi, Texas, and also is currently expanding its BridgeTex Pipeline in the basin.
Why the Permian? If you look at the analysis that shows breakeven economics based on where to spend the money, producers that have acreage in the Permian are getting the most profits.
The rig count in the Permian Basin has more than doubled since 2016 with 361 active rigs in the basin as of May 19 vs. 137 a year ago, according to Baker Hughes Inc. (NYSE: BHI).
At the same time, the Energy Information Administration is also projecting an increase of crude oil production in the Permian Basin to an estimated 2.4 million bbl/d in May. The Permian produced about 2 million barrels per day (bbl/d) of crude oil in May 2016.
However, midstream developers are already addressing the projected constraint with announced midstream projects in the Permian so far during second-quarter 2017 significantly exceeding activity in the rest of the U.S., according to a May 23 report by Stratas Advisors.
So far, Permian midstream developers have announced 23 new projects, expansions or completions at expanding pipelines, terminals and docks, tanks and processing plants during the second quarter compared to the 20 projects elsewhere, the report said.
Through its Longhorn and BridgeTex pipeline systems, Magellan currently has takeaway capacity of roughly 575,000 bbl/d, which is expected to increase by 100,000 bbl/d in a month or so following completion of its BridgeTex expansion project.
“Through the process of doing all that we’ve identified some ways to increase the capacity even further,” he said. “We’re very confident we’ll get to 450,000 and we may even be able to get above 450,000 with fairly limited work that needs to be done.”
Barnes said the new pipeline Magellan is developing to transport Permian crude to Corpus Christi will have multiple origin points, both in the Delaware and Midland basins, as well as multiple delivery points in the Corpus Christi area.
Indeed, Texas continues to rank as the U.S. leading natural gas producing state. As a reflection of that, gas transmission and processing activities mount. The complete landscape of the Lone Star State's natural gas industry can be found on Rextag's Texas Natural Gas Infrastructure Map.
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U.S. Crude Breakevens at Less Than $50/Bbl - Pipelines Help
U.S. Shale Breakevens now at $50 instead of $68/bbl. Pipeline management (field and maintenance data), as well as new projects introduced lower operation costs and provide path to future industrial success.
BridgeTex Pipeline is expanding
From Colorado City to Houston, TX to approximately 400,000 barrels per day.
The Haynesville Shale play, located in northwestern Louisiana and eastern Texas, was recognized in March 2008. Petrohawk Energy Corp. and Chesapeake Energy Corp. had leased acreages in Louisiana, bringing fame to the region. The Haynesville Shale is crucial for meeting the rising demand for LNG exports from the Gulf Coast because of its location. It's expected that Haynesville will contribute about 13 Bcf/d to the overall growth in U.S. gas demand by 2030. However, drilling in Haynesville is more expensive and challenging due to the depth of its wells, especially when compared to areas like the Marcellus Shale.
Crude oil prices are on the verge of a significant rise, as per Helima Croft, a top commodities strategist at RBC Capital Markets. She highlights a looming shift in the oil market's supply-demand dynamics, forecasting a potential slowdown in global crude production. This slowdown might push Brent crude prices to $85 in the latter half of 2024.
In January 2024, the United States saw a mix of ups and downs in the number of active drilling rigs across its major oil shale regions and states. Starting with the shale regions, the Permian Basin led with a slight increase, reaching 310 rigs, which is 3 more than in December. The Eagle Ford in East Texas held steady with 54 rigs, unchanged from the previous month. Meanwhile, both the Haynesville and Anadarko regions saw a decrease by 2 rigs each, landing at 42 rigs. The Niobrara faced a larger drop, losing 4 rigs to settle at 27. On a brighter note, the Williston Basin and the Appalachian region saw increases of 2 and 1 rigs, respectively, resulting in counts of 34 and 41 rigs.