News Release

The Permian’s black box of natural gas pipelines

Shining a light on takeaway constraints and why this prolific basin may be at risk if pipelines aren’t soon built

byEnverus

CALGARY, Alberta (June 4, 2024) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS and generative AI company, has released its forecasts of natural gas pipeline capacity, constraints and basis in the Permian basin.

In the report, EIR analyzes the black box that is the Permian pipeline network, digging into interstate and intrastate pipelines and forecasts the impact of constrained pipe capacity on natural gas production growth and the Waha basis.

“Transporting natural gas in Texas relies on a mixture of state-regulated pipelines as well as ones overseen by the federal government,” said Jason Feit, an advisor at EIR and report author.

“Due to limited public disclosures required by Texas regulators, any attempt to fully understand Permian gas takeaway capacity is as much art as it is science. EIR’s new report shines a light on gas takeaway and shows how growing gas output in the Permian, a key producing area for the U.S., may be at risk if more pipelines aren’t soon built,” said Feit.

“Currently, close to a quarter of EIR’s forecast of total Permian gas production for 2030 is at risk due to lack of existing and approved infrastructure to transport gas to consuming markets. For example, the Matterhorn Express pipeline will provide temporary alleviation in the Permian but by 2026 more pipe is needed. There are four proposed projects that could help fill the required capacity however they are all yet to reach an FID,” Feit said.

Key takeaways from the report:

  • Gas pipelines out of the Permian are at capacity and will remain so until the second half of 2024 when Matterhorn Express comes online.
  • Volatile Waha gas price has the potential to spend more time below zero due to lack of takeaway capacity constraining the basin The Waha forward curve doesn’t adequately capture the tight dynamics post 2026.
  • Given similar levels of production and limited regional demand, little to no spare capacity exists in the Permian. Factoring in both planned and unplanned maintenance events, the result is an extremely tight market culminating in ongoing price volatility.

EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research.

You must be an Enverus Intelligence® subscriber to access this report.

About Enverus Intelligence Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections between energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted energy-dedicated SaaS company, with a platform built to create value from generative AI, offering anytime, anywhere access to analytics and insights for more than 95% of U.S. energy producers and more than 40,000 suppliers. Learn more at Enverus.com.

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