Will Permian gas limit the price of Haynesville gas?

With New Permian Takeaway Capacity Coming Online, Gas Production Could Soar

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For the first time in years, the Permian Basin’s chronic natural gas takeaway constraint is beginning to ease — and in a big way. Major pipeline projects entering service this year and next will add roughly 5.3 Bcf/d of new egress capacity from the Waha area, led by the Gulf Coast Express (GCX) expansion, Hugh Brinson Pipeline and Blackcomb Pipeline. That buildout should materially improve Waha pricing and reduce the risk of severe in-basin discounts, but it also raises a new set of questions. In today’s RBN blog, we’ll discuss the major Permian gas pipeline projects scheduled to come online in 2026 and 2027, how much new capacity they will provide, and consider what the shift means for Waha prices, Gulf Coast balances and the U.S. natural gas market.

This is the first blog in a series examining the outlook for the major U.S. producing basins. The Permian, a major topic of discussion at our upcoming School of Energy: Fundamentals, is the country’s largest oil-producing basin and one of the biggest drivers of U.S. gas growth, which makes it the natural place to begin. Its crude-oil-focused wells produce large and growing volumes of associated gas, but getting that gas out of West Texas has become one of the market’s biggest challenges and a major constraint on oil production. In the series ahead, we will look at the Permian’s major producers and the basin’s next set of challenges, including what increased production will mean for the NGL market. For today’s blog, let’s start with the big gas pipeline projects that have come online or are set to begin operations this year or next.

In June, Kinder Morgan brought its Gulf Coast Express expansion (pink line in Figure 1 below) online. The project added 570 MMcf/d, or about 0.6 Bcf/d, of capacity from the Waha hub (blue circle to left) to the Agua Dulce hub (blue circle at bottom) in South Texas. It is fully subscribed and can move about 2.6 Bcf/d in total. The new capacity helped Waha prices recover sharply from their lows (more on this below) but didn’t solve the Permian’s takeaway problem on its own.

That brings us to the Hugh Brinson Pipeline (purple line in Figure 1 above), the next big outlet for Permian gas. Phase 1 construction is complete and the line has started moving gas. Pipeline owner/operator Energy Transfer expects the ramp-up to continue through September, when the project should reach its full 1.5 Bcf/d capacity. The exact volumes moving today are not public, so while we know gas is flowing, we don’t know how much. Once fully ramped, the pipeline will give producers another route out of Waha to Maypearl, south of the Dallas-Fort Worth area. That is a big deal for Waha because it gives trapped Permian gas another path to higher-value markets in addition to the Gulf Coast. Energy Transfer will later add compression and lift west-to-east capacity to 2.2 Bcf/d, and it is targeting Q2 2027 for Phase 2 completion.

Next up is the Blackcomb Pipeline (green-dashed line), a 2.5-Bcf/d pipeline that runs from the Permian to Agua Dulce. It has begun commissioning and could enter service by the end of October, then ramp up to its full capacity through the rest of 2026. Blackcomb is operated by WhiteWater Midstream and is 70% owned by the WPC joint venture, 17.5% by Targa and 12.5% by MPLX. (WPC is owned by WhiteWater, MPLX and Enbridge.) It gives Permian producers yet another major outlet for their gas and should further ease pressure at Waha. In 2027, the planned Traverse Pipeline between Agua Dulce and the Katy/Houston area is expected to give shippers — including Blackcomb-connected supply — additional options.

Then comes Eiger Express (orange-dashed line), a new 48-inch-diameter pipeline that will move 3.7 Bcf/d from the Permian to Katy, west of Houston. It is expected to enter service in mid-2028 with 2.5 Bcf/d, with the remaining 1.2 Bcf/d coming a year later in mid-2029. The Matterhorn joint venture owns 70% of Eiger, while ONEOK and MPLX each own 15%. (The Matterhorn group includes WhiteWater, ONEOK, MPLX and Enbridge.)

Next, let’s look at the flows out of the Waha hub, because it tells the story of the past year and gives us some big clues about what comes next as new takeaway capacity comes online. As Figure 2 below shows, eastbound flows out of the hub have been running close to 14 Bcf/d for most of this year, very near the current capacity (dashed black line), leaving very little room in the system. That starts to change this fall. Capacity should rise above 16 Bcf/d in October and approach 19 Bcf/d in November as Hugh Brinson and Blackcomb ramp up.

The added capacity is important because the Waha market has been under extraordinary pressure. Waha normally trades below Henry Hub because it is a production hub with little local demand, so gas must move to the Gulf Coast, Mexico, and other demand centers. Intermittently throughout 2024 and 2025, Waha basis fell to extremely low levels. Producers without long-term offtake agreements or hedging had to accept deeply discounted prices for gas — and often negative outright prices — to keep their oil wells running. In the first half of 2026, the situation became even more grim for unhedged producers. Waha basis repeatedly fell to $5-$9/MMBtu below Henry Hub as associated gas production grew faster than new pipeline capacity could be added to move it out of the basin. 

The turn came in June and July. As the GCX expansion entered service and Hugh Brinson began moving early volumes, Waha basis tightened sharply. Prices averaged about $1.28/MMBtu below Henry Hub in July, compared with roughly $6/MMBtu below Henry Hub during the first six months of the year (dark-pink line in Figure 3 below).

We still expect some bumps over the next couple of months as the new pipelines ramp up, but at least Waha prices should be in positive territory. Our Arrow Model puts Waha around $1.08/MMBtu below Henry Hub in August and $0.95/MMBtu below Henry Hub in September; it then averages minus $1.23/MMBtu below Henry Hub for the following 14 months. In short, we do not expect the Waha price environment to look anything like it did earlier this year. Once Hugh Brinson reaches full service and Blackcomb comes online, the extreme constraint-driven discounts should mostly be behind us.

That gives Permian producers more room to grow. The Permian has reached record production levels and is expected to continue growing in the coming months, with future gains projected through 2027. We anticipate several Bcf/d of incremental production capacity over that period. We also see room for growth to accelerate, enough for our long-term outlook to assume another Permian pipeline will be needed by 2033, reflecting the need for midstream infrastructure to keep pace with production.

The question now is what happens after the gas leaves the Permian. If production continues to grow, more gas will move toward Katy and the Texas Gulf Coast just as LNG demand is ramping up. That could shift the pressure further downstream. We are already seeing weakness at Katy and Houston Ship Channel. Pipeline projects such as Trident, Blackfin and Mustang Express should add routes toward the Sabine River area and help connect West Texas supply with growing LNG demand. The question is whether that infrastructure arrives fast enough.

If it does, the Permian gets another leg of growth without recreating the Waha pricing problem. If it does not, the constraint could show up somewhere else, whether in South Texas, along the Gulf Coast or in Louisiana. That is what we’ll be watching as this series continues: How much more can the Permian produce once gas is no longer the constraint, how quickly can the downstream system absorb those volumes, and how will producers respond?