The spigot has opened on a new crude oil pipeline to transport Permian Basin supplies from a connection point near San Antonio, TX, down to NuStar Energy LP’s Corpus Christi terminal.

The second stage of NuStar’s West Texas Intermediate (WTI) export project, which includes an eight-mile, 30-inch diameter pipeline, connects with Plains All American’s new Cactus II long-haul pipeline in Taft, which ramped up last month, NuStar said Wednesday.

NuStar recently completed a project connecting its existing 16-inch diameter pipeline in South Texas to Cactus II, and the company exported its first shipment of long-haul Permian crude from its Corpus Christi terminal last month.

The company is also building additional storage at the Corpus Christi terminal capable of storing 600,000 bbl, which is due to be completed by the end of this year and bring its total capacity to 3.9 million bbl.

NuStar CEO Brad Barron touted the continued growth in the South Texas crude system, which is “experiencing throughput at near the historically high levels in the Eagle Ford Shale’s heyday in 2015.” NuStar has also seen increased utilization at its Corpus Christi terminal, which is now leading “the impending wave of Permian long-haul crude oil.”

NuStar’s latest crude project is one of several being placed in service this year to accommodate growing Permian production, which, until recently, had been constrained because of a lack of takeaway capacity. In addition to Cactus II, the Epic natural gas liquids pipeline is providing interim crude service until the mostly parallel 590 million b/d Epic crude line enters service in January 2020. Interim service on the line is expected to begin this month.

The 900 million b/d Gray Oak pipeline, being developed by Enbridge Inc., is also on track for initial flows this year.

The wave of new crude oil pipelines is set to tighten up price spreads between WTI and Brent barrels. In its August edition of the Short Term Energy Outlook (STEO), EIA said it expected WTI crude to average $5.50/bbl less than Brent during the fourth quarter and in 2020, narrowing from the $6.60 spread during July.

The narrowing spread reflects EIA’s assumption that crude pipeline transportation constraints from the Permian to Gulf Coast refineries and export terminals are going to ease in the coming months.

“These very lumpy capacity additions are apt to continue to disrupt the Permian oil supply-demand balance and prices as they come online,” RBN Energy analyst Jason Ferguson said.

In addition to its enhanced crude transportation capabilities, NuStar has begun moving volumes on the fully subscribed expansion of its Valley Pipeline in South Texas after essentially doubling the system’s capacity to supply about 90,000 b/d of refined products from Corpus Christi to the Rio Grande Valley and northern Mexico.

NuStar also began moving volumes of diesel into northern Mexico following the reactivation of the partnership’s existing refined products pipeline in Mexico.