Permian Gas Takeaway Can’t Come Fast Enough — Countdown to Matterhorn Express Extended

The race is heating up for building natural gas pipeline takeaway capacity out of the Permian. Associated gas production from the crude-focused basin is at record highs this month and gaining momentum, which means that without additional pipeline capacity, the Permian is headed for serious pipeline constraints — and potentially negative pricing — by late this year or early next, which would, in turn, limit crude oil production growth there. Midstreamers are jockeying for the pole position to move surplus gas from the increasingly constrained basin to LNG export markets along the Gulf Coast. One of the contenders, Matterhorn Express Pipeline (MXP), a joint venture (JV) between WhiteWater, EnLink Midstream Partners, Devon Energy and MPLX, announced its final investment decision (FID) late yesterday. In today’s RBN blog, we provide new details on the greenfield project.

You probably won’t be surprised to hear that we believe the Permian Basin is set for another year of crude oil and natural gas production growth. Everyone’s come to expect that from the Permian. What is new, though, is that the vast production area in West Texas and southeastern New Mexico has taken on some serious global significance over the past year — especially as an increasingly important energy supplier to Europe. That emerging role is likely not only to support continued production growth in the Permian but also to shape how the basin’s infrastructure is built out through the rest of the 2020s. And we also know that infrastructure development is critical to the Permian’s ongoing success — in 2023, new gas pipeline takeaway capacity is needed pronto and it may not be long before new oil-pipeline capacity from the Permian to Corpus Christi is required too. In today's RBN blog, we provide this year’s outlook for Permian natural gas and oil markets.

Crude oil production in the Permian may or may not have peaked — that’s TBD. What we do know is that even if the shale play’s oil output flatlines, the Permian will generate increasing volumes of natural gas (and NGLs) and virtually all of it will need to be piped to other markets, primarily the Gulf Coast to feed existing and planned LNG export terminals, gas-fired power plants and other large consumers. To keep pace with that undeniable need for more Permian-to-Gulf takeaway capacity, WhiteWater has announced plans, through its Matterhorn joint venture (JV), for yet another mountain-themed gas conduit to the coast. In today’s RBN blog, we discuss WhiteWater’s newly unveiled Eiger Express Pipeline.