Don’t Stop ’Til You Get Enough – Are We Building Enough Gas Pipeline Capacity East Out of Katy?

The volumes of Permian natural gas flowing into the Katy area west of Houston will be increasing sharply over the next few years, as will gas demand from new and expanding LNG export terminals near the Texas/Louisiana border. Three new pipelines with a combined capacity of 8 Bcf/d — Blackfin, Trident and Mustang Express — are being developed to move gas from Katy to the state line, but will that be enough? In today’s blog, we’ll use RBN’s Arrow Model to assess Enbridge’s recently unveiled proposal to add up to 2 Bcf/d of incremental capacity from Katy to the Gillis Hub in southwestern Louisiana.

We have blogged extensively over the past few years about three critically important and intertwined topics: fast-rising production of associated gas in the Permian, the massive buildout of new LNG export capacity along the Gulf Coast, and the frenetic development of gas pipeline capacity from Permian wells to water. Much of the discussion has focused on takeaway pipelines out of West Texas to the Agua Dulce Hub in South Texas and the Katy Hub — most recently, we looked at the record-busting plan by a WhiteWater Midstream-led consortium to build the 4.5-Bcf/d Solitude Pipeline, which will consist of twin 48-inch-diameter pipes from the Waha Hub to the Katy area.

But getting Permian gas to inland hubs like Katy and Agua Dulce — or to the Dallas/Fort Worth area, like Energy Transfer’s Hugh Brinson Pipeline — addresses only part of the challenge. The other part is, how do you get gas from there to where it’s demanded most, namely to LNG export terminals along the Gulf Coast between Port Arthur, TX, and Cameron Parish in the southwestern corner of Louisiana. Within that 40-mile stretch, about 59 MMtpa (~6.7 Bcf/d) of LNG export capacity is in operation and another 86 MMtpa (~9.4 Bcf/d) has reached a final investment decision (FID) and is either under construction or will be soon.

Sure, a sizable portion of that gas demand from existing and planned LNG export terminals will be met by the Haynesville Shale in northwestern Louisiana and northeastern Texas, but while Haynesville gas is produced at a relatively high cost, gas from the Permian is produced as a no-cost byproduct of crude oil-focused drilling and needs to find a home.

Midstream developers have been working hard the past couple of years to advance pipeline projects to transport more gas from the Katy area to Port Arthur and beyond. For example:

• A joint venture of WhiteWater Midstream and LNG exporter Venture Global is building the 3.5-Bcf/d Blackfin Pipeline (dashed purple line in Figure 1 below) from Colorado County, TX, (just west of Katy) to Jasper County, TX, near the Texas/Louisiana line. Blackfin is slated to start up in Q4 2026 or Q1 2027. It will connect in Jasper County with CP Express (dashed orange line), a 2.2-Bcf/d interstate line being built to supply feedgas to the CP2 LNG facility just across the border in Cameron Parish.
• Kinder Morgan is constructing the 2-Bcf/d Trident Pipeline (dashed dark-red line) from Katy to the Port Arthur area; it expects to finish Phase 1 (1.5 Bcf/d) in Q1 2027 and a 500-MMcf/d expansion (Phase 2) in Q4 2028.
• ARM Energy and PIMCO are jointly developing the 2.5-Bcf/d Mustang Express pipeline (dashed blue line), which by late 2029 or early 2030 will move gas from just west of Katy to the Port Arthur area.