Some needed relief for the Permian’s pain in the (bottle)neck
Because new wells are drilled much faster than pipelines can be built, pipelines in the Permian Basin have been unable to keep up with the overwhelming production of oil and natural gas. The Permian Basin bottleneck has for some time been pressing down Midland crude prices in relation to West Texas Intermediate (WTI), a grade of crude oil used as a benchmark in oil pricing. But all that is about to change. The Cactus II pipeline is commencing line fill this month. Line fill is the process of filling a new pipeline with oil before commercial deliveries begin. It will be the first of three new pipelines being built to relieve the backup.
Plains All American Pipeline, L.P. invested 1.1 billion and provided 2,650 jobs to construct the Cactus II pipeline, and this month it will see flows of 300,000 barrels per day (bpd), and should be running at its capacity of 670,000 bpd by the end of September. The first part of the new pipeline originates at Wink, Texas then runs roughly 90 miles to McCamey, Texas. From McCamey it extends another 435 miles or so to Corpus Christi, Texas.
Plains All American Pipeline, L.P. is a good neighbor
In the Permian Basin region, Plains All American Pipeline, L.P. has more than 4,700 miles of pipeline and 18 million barrels of oil storage capacity. They also have dock facilities enabling the export of U.S. crude oil to markets around the world. They have more than 400 employees in the region, and have invested over 3 billion in the Permian Basin in just the last five years.
Even beyond that, they want to give back even more. To do so, Plains All American Pipeline, L.P. has created the First Responders Grant Program. Its goal is to provide the training and the response equipment needs of responders along the Cactus II pipeline route in Texas. Grant applications can be downloaded on the Plains All American Pipeline, L.P. website.
This is only the first of three
The Cactus II is the first to offer bottleneck relief. Later this year will come the Epic pipeline. It will run for 730 miles with origination points in Orla, Pecos, Saragosa, Crane, Wink, and Midland in the Permian Basin then to Gardendale and Helena in Eagle Ford Shale and then on to the Port of Corpus Christi.
The Gray Oak pipeline, also expected this year, will move 900,000 bpd 850 miles from the Permian Basin and Eagle Ford Shale to storage terminals and refineries in Corpus Christi and Brazoria County.