NEW YORK—Enterprise Products Partners LP (NYSE: EPD) said it has filed permits to construct another crude pipeline out of Midland, Texas, in the Permian Basin to Houston after receiving “serious interest” from customers:
“If we’re able to successfully underwrite this third pipeline, we would have a lot of flexibility to convert Midland-to-ECHO 2 back into NGL service should demand support it,” CEO Jim Teague said during an earnings call May 1.
As production surged in the Permian basin, it sparked a flurry of new pipeline projects to keep pace with the rapid growth, causing analysts and traders to say the Permian will have excess takeaway capacity within about a year.
However, Enterprise said there is a dearth of pipelines connecting to Houston, adding that the hub has access to export markets, storage and Gulf Coast refining markets.
“Fact of the matter is we have a decent number of producers who are coming to us, asking us to build another pipeline,” Brent Secrest, Enterprise senior vice president, adding that “essentially all” of the company’s contracts are locked in with 10-year deals.
Costs to build pipelines have risen slightly but Enterprise said it has locked in costs for steel and pipe.
Companies added two oil rigs in the week to Oct. 11, bringing the total count to 712, Baker Hughes, a GE company, said in its weekly report. In the same week a year ago, there were 869 active rigs.
The new Social Democratic government has come under pressure from its left-leaning allies in parliament to ban future oil and gas exploration to speed up phasing out of fossil fuels, which is seen as crucial to curbing global warming.
The field is located southwest of the Marulk Field, Equinor said, while it estimated gas resources to be about 50 million to 88 million barrels of oil equivalent.