Enterprise Products Shelves New Pipeline Plans in Permian Amid Market Shifts

In a statement today, Jim Teague, co-CEO of leading U.S. energy pipeline operator Enterprise Products, announced that the company does not plan to construct a new crude oil pipeline from the Permian Basin in West Texas. This decision comes as the industry undergoes a consolidation phase, with major shale field players pledging to cap production to prevent an oversupply that could lead to a drop in oil prices.

Teague also addressed the status of the company's proposed deepwater oil export project, the Sea Port Oil Terminal (SPOT). He noted that potential customers are hesitant to be the first to sign on to the project. SPOT and three other offshore oil export projects have faced challenges such as multi-year regulatory delays, withdrawal of commercial support, and a slowdown in the growth of U.S. shale oil production.

Changes in global crude oil flows have also impacted the prospects of U.S. deepwater export projects. As Western countries imposed import bans on Russian crude oil following Russia's invasion of Ukraine, Russian oil was redirected to Asia. This reconfiguration has weakened the outlook for American deepwater export projects designed to directly load large supertankers.

Despite these challenges, Teague expressed cautious optimism about the future of the SPOT project. Speaking at the RBN Energy conference in Houston, he stated, "Things have changed, but my gut feeling is that we can get SPOT across the finish line." This indicates the company's continued focus on developing deepwater oil export capacity, even as it refrains from expanding pipeline infrastructure in the Permian Basin.