‘Permian growth overwhelms pipeline capacity’, according to ESAI Energy

ESAI Energy estimates that production from the Permian Basin will grow by over 420 000 bpd in 2017. Moreover, the company expects that an acceleration in drilling activity will increase the basin’s backlog of drilled but uncompleted wells (DUCs).

Midstream companies are responding to the bottlenecks in getting the crude to market by expanding takeaway capacity. By the end of 2017, four new pipeline projects are expected to add over 800 000 bpd of capacity in the region.

Elisabeth Murphy, analyst at ESAI Energy, explains: “the price discount at Midland will ease as more crude makes its way to the Gulf. Permian production will continue to increase in 2018, but with more pipelines in the works, we do not anticipate the current constraint to last.”