Plains-ExxonMobil JV to Build Permian Pipeline

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ExxonMobil and Plains All American Pipeline (PAA) plan to build a new pipeline that will add 1 MMbpd of takeaway capacity for Permian Basin crude oil and condensate.

The Irving-based oil giant signed a letter of intent with Houston’s PAA to form a joint venture for the project, which would transport oil to from multiple locations in the Permian Basin to the Texas Gulf Coast.

PAA said the proposed common carrier pipeline would be designed to ship more than 1MMbd per day, providing a safe, efficient and cost-effective option to transport ExxonMobil and other third-party production to market.

The pipeline would originate in both Wink and Midland, Texas, with delivery points in Webster, Baytown and Beaumont, Texas. A priority would be placed on using existing pipeline corridors to help limit potential community and environmental disruptions, PAA said.

After sitting out much of the early shale boom, ExxonMobil has expanded aggressively into the Permian.  It announced plans earlier this year to triple total daily production to more than 600,000 BOE by 2025 from its operations in the Permian Basin in West Texas and New Mexico. It projects tight oil production will increase five-fold during that period.

Citing recent changes in the U.S. corporate tax rate, ExxonMobil also said it plans to spend more than $2 billion on transportation infrastructure to support its Permian operations.

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