A lack of pipelines to carry oil and natural gas out of the Permian Basin in West Texas and southeastern New Mexico will limit exploration and production and weaken realized prices until late 2019 when new pipeline cpacity comes online.
The oil field at the heart of the U.S. shale boom appears to be choking on its own growth, a surprising development wiht big ramifications for energy profits and global markets.
Epic Midstream Holdings LP said last year it would build its first oil pipeline in America's most active oil field. It won't be finished until next year, but already Epic Midstream is considering making it bigger.
As pipeline bottlenecks crimp the U.S. shale boom, some companies are racing to address the next potential constraint on American oil output: the terminals to export crude to foreign markets.
The race is on to build Texas' first offshore oil-exporting terminal that could accomodate the world's largest crude-carrying vessels.
A handful of midstream companies are planning offshore terminals in deep water that would allow the full loading of VLCCs via pipeline.
While VLCCs are by far the most cost-efficient way to haul crude to Asia, their Godzilla-like physical dimensions restrict the number of land-based terminals they can use.
A leading contender in the race to construct new offshore terminals is Trafigura, the Swiss-based logistics and physical-trading giant, which in recent years has become a major player in U.S. energy markets.
Today we turn our attention to Tallgrass Energy's $2.5 billion plan, which is a horse of a different color.
Enterprise Products Partners plans to build an offshore terminal 80 miles off the Texas coast. Meanwhile POCCA plans to build an onshore terminal at Harbor Island.
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