East Daley: New Pipelines Could Open Permian Floodgates

Led by the opening of the Matterhorn Express, a slew of projects is set to battle regional bottlenecks in the Permian Basin region but power generation may be the catalyst for newly announced pipelines.

Led by the opening of the Matterhorn Express, a slew of projects is set to battle regional bottlenecks in the Permian Basin region, but power generation may be the catalyst for the pipelines. (Source: Shutterstock.com)

Ajay Bakshani and Maria Paz Urdaneta, East Daley Analytics  Wed, 12/18/2024 - 11:27 AM

Ajay Bakshani is Director of Midstream Equity, East Daley Analytics Maria Paz Urdaneta is Lead Data Analyst, East Daley Analytics

Midstream is back in the Permian Basin. Following the start of Matterhorn Express, investors have pulled the trigger on several new greenfield pipelines to move natural gas away from West Texas. The investments stand to solve a longstanding bottleneck for operators and open the door to more energy production.

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The Matterhorn Express Pipeline is a natural gas pipeline that will transport up to 2.5 billion cubic feet of natural gas per day from West Texas to Southeast Texas: 

  • Length: The pipeline will be approximately 490 miles long. 

    Diameter: The pipeline will have a diameter of 42 inches. 

    Origination point: The pipeline will originate in West Texas near Coyanosa. 

    Delivery point: The pipeline will deliver natural gas to Wharton County, Texas at the Coastal Bend Header (CBH). 

    Counties: The pipeline will cross 19 counties in Texas, including Austin, Burnet, Concho, Fort Bend, Glasscock, Irion, Lapasas, Lee, McCulloch, Midland, Reagan, San Saba, Tom Green, Waller, Washington, and Wharton. 

    Developer group: The developer group includes WhiteWater Midstream LLC, EnLink Midstream, LLC, Devon Energy Corp., and MPLX LP. 

    Construction: Construction is expected to begin in June 2023 and conclude by June 2024. 

    In-service date: The pipeline is expected to be in service by the end of 2024. 

  •  

The pipeline will connect to Transco and other pipelines, and will serve domestic consumers including liquefied natural gas export plants on the Gulf Coast. 

 

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Newly approved pipeline projects, including Energy Transfer's Hugh Brinson Pipeline and WhiteWater Midstream's Blackcomb Pipeline, are set to add more than 7.7 Bcf/d of takeaway capacity to the Permian Basin by the end of 2026, helping ease chronic bottlenecks, according to East Daley Analytics. The capacity expansion will free more room for oil and natural gas production growth in the basin.

Full Story: Hart Energy (12/18) 

Plus bring Permian prices more in line with rest of the country (or at least Texas)

No more negative gas prices with increased take away capacity

A big difference with this Permian gas vs Haynesville gas is that the Permian gas has some good BTU content and therefore NGL yields.

Versus the normally lean / dry gas of the Haynesville

Yes, Permian gas prices have been constrained by lack of takeaway capacity for years.  The Waha Hub prices have been negative multiple times in the past.  And yes, that wet gas has better BTU than HA gas and NGLs and will provide additional profit for Permian companies.  The question in regard to both natural gas and NGLs is one of supply and price.  When supply is low, the price is usually higher.  When the supply is high, the price is lower.  Permian oil operators can live with both but can Haynesville operators.  There is a limit to how low the can drive their F&D costs.

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