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Report: Permian Basin production putting strain on pipelines

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Unless new oil pipelines are put in the Permian Basin, production could exceed transport capacity by next year, according to a report by the Federal Reserve Bank of Dallas.

The May 2018 Energy Indicators report stated that data gathered from several sources indicates that oil production growth in the basin, which includes portions of southeastern New Mexico, is straining existing pipeline capacity.

Congestion could become a challenge by early 2019, according to the online newsletter, available at dallasfed.org.

“This is particularly true for smaller producers because larger exploration and production firms are more likely to have long-term contracts in place for takeaway capacity,” the report states.

The report also presented information about job growth, oil prices and rig counts in the basin, all of which increased in March and April.

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