Pipeline operator Magellan says Permian crude flows to Houston will rise
By Arathy Somasekhar
HOUSTON, Feb 2 (Reuters) - U.S. pipeline operator Magellan Midstream Partners LP on Thursday predicted crude oil flows from the Permian Basin will shift toward Houston as shale production rises and lines to export hub Corpus Christi fill.
A surge in U.S. oil exports has pushed more and more barrels of crude from the Permian basin of West Texas and New Mexico to the port of Corpus Christi, the top U.S. oil export hub. Its exports hit an all-time high in December, exceeding a record 70 million barrels a month.
The Tulsa, Oklahoma-based company's crude oil volumes transported on its fully owned pipeline in the fourth quarter rose 47% to 65.2 million barrels, while volumes of refined products climbed about 1.8% to 144.5 million barrels.
Volumes on Magellan's wholly-owned pipelines will increase about 20% this year, the company said, primarily on the back of higher shipments moving on its Houston distribution system.
"There's certainly a pull through Corpus for export purposes. And those pipes as a result are becoming more full, which should lead to barrels flowing over into the Houston pipes as production in the Permian continues to grow," said Chief Executive Aaron Milford.
That shift would likely push up prices at the coast , widening the arb, or differential in prices at the coast compared to Midland, Texas, going into 2024, Milford added. (Reporting by Arathy Somasekhar in Houston; Editing by Marguerita Choy)