Despite a strong push toward renewable energy, oil and gas remains the largest source of fuel for society, and Texas’ Permian Basin is expected to be a global leader in crude oil production, according to a report by Mackenzie Wood. With that production comes the need for the midstream pipeline infrastructure to gather, transport and process the oil.
“We are in the midst of one of the largest crude infrastructure investment booms in U.S. history, with much of the investment focused on the Permian basin,” says John Coleman, principal analyst, North America crude markets, with Wood Mackenzie. “As massive as this current investment wave is, we don't think the story is yet finished. Additional capacity adds will be needed again by the end of the next decade.”
Coleman says the following chapter in the Permian story will focus on sufficient export terminal capacity in coastal markets. “As these new pipelines move into service later this year, we expect a surge in crude export volumes out of Corpus Christi,” he says.
Wood Mackenzie expects a moderate overbuild of pipeline capacity in the early 2020s as the current wave of pipeline investments complete. These investments include seven proposals for new Permian pipelines, with four ultimately reaching a final investment decision. More than 2 million barrels of oil per day of this new capacity will flow into the Corpus Christi, Texas, market for export.
