Platts unit Bentek Energy projects August Permian crude production at 1.7 million b/d, with current pipeline capacity out of the region at 1.27 million b/d. Rail will play a negligible role in moving crude in the Permian, expected to carry only 627,000 b/d in 2015, Bentek data shows.
"WTI Midland/Cushing differentials should revert to historical levels in early 2015 with completion of Plains' Sunrise pipeline," John Mayes, director of special studies at Turner, Mason, told attendees in Houston at last week's RBN Energy/Turner Mason conference called "Surviving the Flood."
Demand for pipeline capacity has grown so quickly that Enterprise Product Partners, holder of a 13% stake in the Basin Pipeline that is majority-owned by Plains All American, filed with the Federal Energy Regulatory Commission in August to enact a lottery system as a way for new shippers to get space on the line.
In the filing, Enterprise said 214 new shippers submitted nominations totaling 1.8 million b/d of Permian crude on the 450,000 b/d line in July 2014. Just a year ago, in September 2013, there were 11 new shippers seeking space on the line, which still has six regular shippers.
The stranding of crude in the Permian Basin has affected crude price spreads. The differential between WTI out of Cushing and the smaller oil hub in Midland, Texas, widened to $11.50/barrel on Friday. Since last August, the spread has averaged $6.02/b in favor of WTI ex-Cushing, Platts data showed.
WTS ex-Midland traded on average at a $5.70/b discount to WTI ex-Cushing over the last year, in line with recent historical pricing relationships. However, as Permian production ramped up, the more sour WTS has been trading at more than a $10/b discount; it was at $10.55 below WTI Cushing on Friday.
Current pipeline takeaway capacity in the region will be expanded, which is expected to narrow the crude spread differentials.
Following are the major exit pipelines now carrying crude out of the Permian:
| Company | Pipeline | Capacity (mmb/d) | Origin | Destination |
| Kinder Morgan | Wink | 120 | Wink, TX | El Paso, TX |
| Magellan | Longhorn | 225 | El Paso, TX | Houston, TX |
| Oxy | Centurion | 75 | West Tx pts | Cushing, OK |
| Plains | Basin | 450 | Jal, NM | Cushing, OK |
Source: Platts, Bentek, RBN/Turner Mason
Current pipeline takeaway capacity will be increased as midstream companies build new lines or repurpose existing natural gas or products pipelines. Below are some of the projects that are expected to send more crude either to the Gulf Coast's refineries or to Cushing:
| Company | Pipeline | Capacity (mmb/d) | Origin | Destination | Service Date |
| Magellan | Longhorn | 25 | El Paso | Houston | Q3-2014 |
| Oxy/MMP | Bridgetex | 300 | Colo. City | Houston | Q2-2015 |
| Plains | Cactus | 200 | McCarney | Corpus Christi | Q2-2015 |
| Plains | Sunrise | 250 | Midland | Colorado City | Q1-2015 |
| Sunoco | Permian Express II | 200 | West Texas | Gulf Coast | Q2-2015 |
