Bigger Oil Pipelines Are Coming to West Texas to Ease Bottleneck
Tue, July 31, 2018
The upstart company, backed by private equity, had been planning to build a conduit capable of carrying 440,000 barrels a day from West Texas to Corpus Christi on the Gulf Coast. Now, it’s considering enlarging it to 675,000 barrels a day, after interest picked up in recent months.
“We’re taking a look at upsizing very cautiously,” said Epic Midstream Chief Executive Phil Mezey. It plans to make a decision in coming weeks.
Bottlenecks have become a problem in the Permian Basin of Texas and New Mexico at the center of the shale boom. Drillers are pumping so much oil and gas that pipelines considered more than adequate just a few years ago now are overwhelmed.
That is creating opportunity for pipeline builders, who are planning an array of new oil and gas conduits in Texas, where they see increased demand from customers willing to pledge to contracts.
Epic Midstream Holdings, Plains All American Pipeline LP, and Phillips 66 in a partnership with refiner Andeavor are building new oil pipelines aimed at Corpus Christi that are set to add upward of 1.8 million barrels of combined capacity late next year.
“We’re getting a lot of encouragement from Permian producers to accelerate,” Phillips 66 Chief Executive Greg Garland said. “For the past six months the interest level has been high and remained very high.”
Companies including Kinder Morgan Inc., meanwhile, are planning to build new natural-gas pipelines.