Magellan, Oxy start new Texas shale oil pipeline

An oil pipeline designed to transport as much as 300,000 barrels per day from the Permian shale basin in Texas is now in service, operators announced.

Magellan Midstream Partners and Occidental Petroleum Corp. said its BridgeTex pipeline connecting the Permian basin to Houston refinery markets started commercial service. Construction of the pipeline began in November 2012.

"Initial flow rates are expected to ramp up over time, as the BridgeTex Pipeline is capable of transporting up to 300,000 barrels per day of Permian Basin crude oil," the companies said in a Monday statement.

Occidental, known by its stock ticker symbol Oxy, said in its second quarter financial statement Permian shale helped boost its oil production to 278,000 bpd, up more than 8 percent from second quarter 2013.

The new project would relieve some of the midstream bottlenecks that have developed as a result of the increase from Texas shale.

Permian production increased 58 percent from 2007 to reach 1.35 million bpd last year, which represents 18 percent of total U.S. crude oil production.