NuStar CEO 'encouraged' about Permian production growth as Q1 volumes surged

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NuStar Energy (NYSE:NS) expects crude volumes in its Permian system could exit the year at 570K bbl/day and easily exceed 600K bbl/day in 2023, CEO Brad Barron said Thursday, after spiking 27% from a year earlier to average 510K bbl/day in Q1.

"We are encouraged by what [customers] are telling us, particularly our privately held customers, about their drilling plans for the rest of 2022," Barron said on the company's earnings conference call, as reported by S&P Global Platts.

NuStar (NS) reported Q1 total crude and products pipeline volumes jumped 16% Y/Y to 1.87M boe/day, while crude volumes increased 19% to 1.31M bbl/day and refined products volumes gained 11% to 563K boe/day.

"The world will continue to require fossil fuels to supply the majority of its growing energy needs now and for many decades," Barron said on the call.

Plains All American Pipeline (NASDAQ:PAA) and Energy Transfer (NYSE:ET) also reported significantly higher crude volumes out of the Permian Basin, S&P Global Platts reported.

Including the new Plains Oryx Permian Basin joint venture with Oryx Midstream, Plains (PAA) said Q1 crude oil volumes surged 32% Y/Y to 7.16M bbl/day, including 5.21M bbl/day from the Permian, up 39%.

In his company's earnings conference call, Plains (PAA) CEO Willie Chiang said he expects Permian volumes will grow by nearly 600K bbl/day per year to hit 7M bbl/day in 2025 and triggering tight crude takeaway capacity.

Energy Transfer (ET) reported 4.22M bbl/day of Q1 crude pipeline volumes, up 19% Y/Y, with growth primarily in the Permian but also in the Bakken shale, including the Dakota Access Pipeline.

NuStar (NS) ended -0.8% in Thursday's trading after reporting a Q1 GAAP loss.