Some major relief for Permian producers. – EPIC Midstream Holdings announced on August 16 that it has begun shipping Permian Basin crude on its 400,000 barrel per day (bpd) oil pipeline to the Texas Gulf Coast. The pipeline’s end-point is at the Moda Midstream export terminal at Ingleside, Texas, which lies across Corpus Christi Bay from the Port of Corpus Christi.
EPIC was the second new Permian-related crude pipeline to go into service last week. Trafigura announced on Monday, August 12 that it had begun shipping 300,000 bpd to its oil hub at the Port of Corpus Christi via the Plains All American-operated Cactus II system. The Cactus II system expects to be moving crude at its full capacity of 670,000 bpd at some point in September, as other shippers commence inputs of oil into the line.
With those two events, the crude oil takeaway capacity from the Permian Basin just increased by more than 1 million bpd, with much more new capacity from multiple other projects scheduled to come online in the coming 12 months. Thus, the region’s long-discussed bottleneck nears a successful resolution.
The relieving of the bottleneck is having a positive impact on Permian prices for crude. As Reuters reports, “Midland crude prices firmed this week to as much as 50 cents per barrel above U.S. crude on Thursday, as shippers bid up barrels to fill the new pipelines. A year ago, it had traded around an $18.25 per barrel discount.” What a difference ample pipeline capacity can make.