Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Magellan Midstream Partners LP is evaluating alternative uses for its Longhorn crude pipeline from Texas's Permian Basin, including converting it to carry other commodities like natural gas or refined products, the pipeline and storage company said on Dec. 8.
Pipeline operators' shipping volumes have dipped due to lower production, forcing them to reduce rates to attract barrels to their pipelines. The COVID-19 pandemic slashed energy demand on the heels of a construction spree that added several build pipelines to carry crude out of the Permian, the top U.S. shale field.
The 450-mile (724 km) Longhorn pipeline can transport up to 275,000 barrels per day (bbl/d) of crude from West Texas to Houston.
CEO Michael Mears said he expects relatively flat volumes for a few years on the Longhorn and the Bridgetex crude pipelines, which can transport up to 440,000 bbl/d of Permian crude to the company's East Houston terminal.
The margins on spot shipments from the Permian are currently "extremely low," said Mears, who spoke at a virtual event hosted by Wells Fargo.
He added that he expects to see slow but steady growth over the next few years in Permian production, which should match the current pipeline infrastructure carrying oil out of the basin by 2024 or 2025.
Recommended Reading
E&P Highlights: March 4, 2024
2024-03-04 - Here’s a roundup of the latest E&P headlines, including a reserves update and new contract awards.
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
Activity Offshore Norway Expected to Remain Steady in 2024
2024-01-11 - The Norwegian Offshore Directorate provided updates on 2023 activity, including 14 wildcat discoveries and eight projects going online and urging exploration in frontier areas.
ONGC’s M Field Starts Production in Bay of Bengal
2024-01-09 - ONGC’s M Field represents the second phase of the larger 98/2 Block development project which is expected to reach peak production of 45,000 bbl/d and 10 MMcm/d.
E&P Highlights: Jan. 8, 2024
2024-01-08 - Here’s a roundup of the latest E&P headlines including the second biggest deepwater gas find of 2023 and new contract awards.