Operations update 18 May, page-3

The U.S. Faces A Pipeline Crisis
By Nick Cunningham - Mar 30, 2018, 9:30 AM CDT

The U.S. threatens to swamp the world with oil in the next few years, although that will only be possible if there is a commensurate construction boom for pipelines to move all of that oil to market.

The Permian basin will account for the bulk of the production growth going forward. The International Energy Agency predicts that the U.S. will add about 3.7 million barrels per day (mb/d) between now and 2023, and 2.7 mb/d – or more than 70 percent – of that new supply will come from the Permian and the Eagle Ford.
But those two shale plays are a long way from the Gulf Coast, where the oil can either be refined into fuels or exported abroad. Thus, the oil industry needs a lot of pipeline capacity.
Already, there has been an enormous buildout of pipelines in the last few years. Between 2012 and 2014, the surge in output from the Permian was impressive, but it was also constrained by the lack of pipeline capacity, which forced producers to sell their product at a discount, which reached as high as $20 per barrel relative to WTI. However, new pipelines smoothed out those price differentials, easing the bottleneck that had cropped up when oil production skyrocketed.

The problem is that oil production is set to double in West and South Texas over the next five years, which means that another pipeline wave will be required if the U.S. is to actually expand oil production by as much as everyone thinks it will.

https://oilprice.com/Energy/Energy-General/The-US-Faces-A-Pipeline-Crisis.html