Oil and Gas Pipelines Needed in the Permian Basin

A lack of pipeline capacity is hampering Permian Basin crude oil and natural gas production. Pipelines that were adequate a few years ago are now overwhelmed due to the tremendous growth in production. New pipeline projects are being considered to alleviate the bottlenecks, which are causing some of the region’s oil and gas to trade at steep discounts compared to benchmark prices. Producers selling oil in Midland, Texas, are receiving about $16 a barrel less than what sellers are getting in Oklahoma for crude oil, and the natural gas price differential between Waha Hub in Western Texas and Henry Hub in Louisiana is about $1 per million Btu.