BridgeTex Pipeline, the last crude oil pipeline to fill from the Permian Basin to Houston, has revised its tariff to attract new commitments, a sign of the dwindling options for shippers as Permian takeaway fills.
Effective July 1, 2025, BridgeTex cut its committed tariff by 27%, from $3.15 to $2.30/bbl. The move marks a clear pivot toward securing longer-term volumes. The pipeline also raised its uncommitted rate to $5.47/bbl, further strengthening the cost advantage of committed barrels.
BridgeTex is owned by ONEOK (OKE), Plains All American (PAA) and the Ontario Municipal Employees Retirement System (OMERS). OKE revealed in its 2Q25 earnings this week that it has doubled its stake in BridgeTex to 60% from 30%, but did not disclose the price or the seller. We hope to learn more when Plains reports earnings Friday (Aug. 8).
The latest tariff revisions reflect the improving outlook for oil pipelines out of the Permian. In East Daley Analytics’ Crude Hub Model, we forecast utilization on Permian pipes to the Texas Gulf Coast to average over 89% at YE25. Routes to Corpus Christi are running nearly full, and spare capacity is only available to the Houston/Nederland refining and export market. Production continues to grow despite Permian operators trimming 2025 capital budgets in response to lower WTI prices. Meanwhile, pipeline owners plan few investments to increase takeaway.
Among these Permian-based pipelines, few have more upside than BridgeTex. Volumes collapsed in 2023 when former owner and anchor shipper Occidental (OXY) opted to move its production to other pipes. Throughput averaged just ~20% utilization in 2023 and bottomed at ~25 Mb/d in August ‘23, leaving a 440 Mb/d system running nearly dry (see figure). Meanwhile, other Houston-bound pipelines ran consistently above 80% utilization, including Longhorn, Wink to Webster, and Midland-to-Echo I and III.
The turnaround for BridgeTex began in late 2023, when volumes surged from ~26 Mb/d in September ’23 to over 320 Mb/d by February ’24. Utilization climbed toward 68% by May ’25, according to the Crude Hub Model.
Risks justify BridgeTex’s shift to committed volumes. Midland-to-Echo II is set to return to crude service in late 2025, adding 200 Mb/d of crude capacity and intensifying competition among Houston-bound pipelines. At the same time, shippers face added “fee stacking” costs when routing barrels at BridgeTex’s origin in Colorado City, TX.
The volume rebound in early 2024 likely resulted from the discounted rates offered ahead of the latest tariff cut. Though the specifics of those earlier deals remain private, the July tariff filing confirms a strategy already in motion.
Despite the recent volatility, East Daley’s outlook is positive for BridgeTex. We expect utilization to hold in 2026 and improve later this decade as the system pivots toward sustained throughput under committed volumes. – Tom Gorbold Tickers: OKE, PAA.
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