Cactus II Oil Pipeline Sees a Big Jump in Permian Basin Shipments

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Cactus II Oil Pipeline Sees a Big Jump in Permian Basin Shipments

Mon, 02/10/2020 - 08:22
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Cactus II Oil Pipeline Sees a Big Jump in Permian Basin Shipments (Reinhard Tiburzy / Shutterstock)
Cactus II Oil Pipeline Sees a Big Jump in Permian Basin Shipments (Reinhard Tiburzy / Shutterstock)

Plains All American's Permian Basin pipeline systems saw crude volumes jump in the 4th quarter of 2019 due to greater flows on its Cactus II pipeline, which began operations in August of last year.

Cactus II consists of 925 km of new 26-inch-diameter pipeline and extends from McCamey, TX, in the southern Midland Basin to delivery points near Corpus Christi. The pipeline can also access the oil hub at Wink, TX, in the Delaware Basin via a capacity lease on another Plains-operated pipeline.

Plains All American plays a vital role in the movement of energy supplies in the United States and Canada, and is particularly active in the prolific Permian Basin development, where output currently tops 4 million bpd of crude, the largest oil producing region in the United States.

The pipeliner said the Wink-to-Webster Pipeline, a joint venture among affiliates of Exxon Mobil Corp, Plains All American, MPLX LP, and Delek US among others, is expected to be in service during the first half of 2021.

The pipeline system is expected to transport more than 1 million barrels of crude oil and condensate per day from the Permian Basin in West Texas to the Texas Gulf Coast.

The shale boom has helped make the United States the world's biggest oil producer but growth is expected to slow as producers follow through on plans to slash spending on new drilling for a second consecutive year in 2020. Growth will also be affected by the oil price, which has slumped dramatically on account of the spreading Corona Virus: the price of West Texas intermediate crude, a key benchmark, fell below $50 this past Monday, a 20 percent decline in less than a month, suggesting that bear market conditions continue to shadow the market, stifling demand and depressing prices.

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