Westbound natural gas flows out of the Permian Basin averaged 2.3 Bcf/d during the week ending December 15, down 0.1 Bcf/d from the prior week and a whopping 0.5 Bcf/d below last year’s level (see chart below). The force majeure at the Roswell, NM compressor station of Kinder Morgan's El Paso Pipeline, which experienced equipment failure on December 3, is still active. However, flow restrictions because of the force majeure on Line 1103 in Arizona were more impactful last week. Kinder Morgan reduced capacity on the line on December 5 to address anomalies on the line in Cochise County then increased flow restriction on December 7 and again on December 10. The restrictions cut around 0.5 Bcf/d of Permian capacity to the West in an already tight market stranding production in the basin and pushing prices deeply negative. El Paso lifted the Force Majeure over the weekend, and capacity was restored as of Saturday’s evening cycle, so prices should normalize this week barring any more issues on the pipeline. Ongoing work on El Paso and frequent operational issues continue to be a thorn in the side of the Basin’s producers and shippers.
Featured Articles
- Analyst Insight
Waha Gas Cash Prices Rebound as Maintenance Eases at Roswell, Elsewhere
As force majeure events at Roswell, NM and in Texas have been resolved, Waha natural gas prices have rebounded significantly week-on-week.
- Analyst Insight
High Production and Low Prices for Gas in the Permian
Prices for natural gas at Waha were ferociously low last week, spurred by record high weekly production and very low prices over the holiday long weekend.
- Analyst Insight
Waha Gas Bears Continue Unabated
Natural gas prices in the Permian remained extremely low over the past week, as issues stemming from apparent low takeaway on Permian Highway were exacerbated by a smaller outage on NGPL.
