One Pipeline Giant Is Looking to Stash the Oil Glut in Its Lines
One Pipeline Giant Offering to Stash the Oil Glut in Its Lines
(Bloomberg) -- Energy Transfer LP, the pipeline operator run by billionaire Kelcy Warren, is looking at ways to free up space on its conduits to store more crude as the coronavirus lockdown leaves the world swimming in oil.
The company has identified two pipelines in Texas that would provide about 2 million barrels of additional storage, according to a spokeswoman. Energy Transfer is in the process of asking the Texas Railroad Commission for permission to change the method of operation on these lines. Argus Media first reported the plans.
“After that it will be a matter of adding pumps, which we can easily achieve,” the spokeswoman said in an email. “We estimate we can be ready by mid-May.”
It was just last month that Plains All American Pipeline LP asked oil producers to scale back production as storage started to fill. Now, prices have plunged so low that drillers are being forced to shut in output. Still, the global oil market faces a massive supply glut and rapidly filling tanks.
The Texas Railroad Commission is now weighing mandatory oil curtailments, though the oil regulator recently delayed a vote on the matter. Instead, the agency launched a task force led by trade groups meant to come up with ways the state can bolster the industry.
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