AlwaysFree: Permian Needs More Infrastructure

Amir Gerges, Shell's vice president for Permian assets, said the Permian basin needs more infrastructure, particularly for moving natural gas and natural gas liquids because production from the region continues to beat expectations.

Although additional gathering facilities and pipelines have been constructed, more is needed to support the projected growth from the Permian.

The Permian basin in Texas and New Mexico has among the lowest breakeven prices of US fields, making it resilient to crude prices swings, but it is also important for the basin to be environmentally resilient with the lowest carbon intensity. That's becoming key as banks and lenders pressure producers to reduce their carbon footprints.

The investor sentiment on the US unconventional industry has changed, with a greater focus on returns, while operators face well productivity and spacing issues amid limited access to capital.

The profile of producers has shifted, with the Permian operations being increasingly dominated by the majors and large independent operators. With stronger balance sheets, they are able to take a longer view on operations. 

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