Report: new pipeline capacity in Permian vital

The Texas Independent Producers and Royalty Owners Association (TIPRO) has released the latest edition of its ‘State of Energy Report’, assessing operations in the Permian over the last decade including production, employment and demographics.

A Decade of the Permian Basin said oil production in the region had increased from less than 1 million bbl/day in 2009 to more than 4 million bbl/day in 2019, with the basin displacing Saudi Arabia’s Ghawar field last year to become the world’s top producing field.

But TIPRO President Ed Longanecker said building new pipelines and increasing takeaway capacity was necessary in order to capitalise on the expansion of production.

“Supporting the build out of critical infrastructure to transport oil and natural gas is essential for the future of the industry, but expanding pipeline capacity coupled with a reduction in capital expenditures and production growth will drive increased competition among carriers, potentially leading to midstream rate cuts,” said Mr Longanecker.

TIPRO Chairman Eugene Garcia said despite the uptick in production, takeaway capacity limitations in West Texas, the escalating trade war with China and capital constraints had all impacted domestic energy production levels in 2019, forcing some operators to scale back spending on drilling projects.

The 2 bcf/day Gulf Coast Express Pipeline was brought online in September 2019 by Kinder Morgan helping to ease production bottlenecks, with five new oil pipelines in development in the region through to 2021.

The TIPRO report also said direct oil and gas employment in the Permian totalled 87,603 in 2019, an increase of close to 43,000 since 2009.

Total oil production in the region exceeded 1.5 billion bbl in 2019.

For more information visit the TIPRO website.

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