HOUSTON (Reuters) - EPIC Midstream Holdings Inc on Thursday began shipping crude oil on its 400,000 barrel per day (bpd) pipeline from the Permian Basin to the U.S. Gulf Coast, pushing Midland crude prices higher, traders said.
Terminal operator Moda Midstream LLC confirmed it would be accepting the Permian crude from the EPIC line at its facility in Ingleside, Texas, by Friday. Oil prices in Midland, the heart of the Permian shale field, rallied to 50 cents per barrel over U.S. crude futures.
San Antonio-based EPIC is the second pipeline operator this year to open a major line from the top U.S. oil field to the Corpus Christi, Texas, area. It followed the start of initial operations on Plains All American Pipeline LP’s (PAA.N) 670,000 bpd Cactus II this week.
The new pipeline will help alleviate a crude oil bottleneck that has weighed on prices in the Permian of West Texas and New Mexico for more than a year. Crude inventories in West Texas rose last week to almost 20.5 million barrels, utilizing more than 60% of the region’s storage capacity monitored by market intelligence firm Genscape.
Midland crude prices firmed this week to as much as 50 cents per barrel above U.S. crude on Thursday, as shippers bid up barrels to fill the new pipelines. A year ago, it had traded around an $18.25 per barrel discount.
EPIC, which did not immediately respond to requests for comment, had said it expected to begin operations in the third quarter.
Reporting by Collin Eaton in Houston; Editing by Chizu Nomiyama and Marguerita Choy