Within the next year, the Permian Highway and Whistler natural gas pipelines will add 4.0 Bcf/d of incremental capacity from the Permian Basin to the Gulf Coast, with gas supplies on those pipes primarily targeting LNG exports. But in the years since these pipeline projects were initially envisioned, market conditions have been radically transformed by consequences of the COVID era, on both the supply and demand sides of the equation. The outlook for supply growth is lower, while the dependability of LNG exports has been thrown into question following massive cargo cancellations this summer. In RBN’s special-edition multi-client market study, titled Some Beach, we break down the consequences of these developments into eight distinct steps that demonstrate how Texas gas markets are likely to evolve as flows and basis respond. Today’s blog summarizes those conclusions.
Our eight steps assess prospective changes on both the supply and demand sides of the Texas natural gas market. On the supply side, the outlook for Permian natural gas production growth is down considerably from the pre-COVID era, due primarily to lower crude oil prices resulting in cutbacks in drilling and completions by Permian producers. Instead of providing crucial pipeline takeaway capacity to handle rapidly growing Permian gas supply, the new pipelines will create a pipeline capacity surplus, which will disrupt regional gas flows and prices.
There has also been a dramatic shift in the demand markets targeted by these pipelines. In the pre-COVID world, it was generally assumed that increasing LNG export capacity along the Gulf Coast would be highly utilized on a consistent basis, with U.S. LNG exports enjoying profitable economics due to the price differential between U.S. and global gas markets. During the summer of 2020, however, this assumption was dashed, as COVID-related demand curtailments in Asia and Europe crushed prices and undermined export economics, resulting in scores of U.S. LNG cargo cancellations.
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About the song
"Some Beach" was written by Rory Feek and Paul Overstreet. It appears as the first song on Blake Shelton's third studio album, Blake Shelton's Barn & Grill. Released as the second single from the upcoming album in July 2004, the song went to #1 on the Billboard Hot Country Songs, and #28 on the Billboard Hot 100 Singles charts. Personnel on the record were: Blake Shelton (lead vocals, acoustic guitar), Shannon Forrest (drums), Paul Franklin (pedal steel guitar), Gordon Mote (piano), Brent Rowan (electric guitar), Ed Seay (additional crash cymbals), Alison Prestwood (bass), Shawn Simpson (shakers), and Johnny Yudkin (fiddle).
Blake Shelton's Barn & Grill was produced by Bobby Braddock and released in October 2004. It went to #3 on the Billboard Top Country Albums, and #20 on the Billboard Top 200 Albums charts. Four singles were released from the LP. It has been certified Platinum by the Recording Industry Association of America.
Blake Shelton is an American country music singer and television personality. He has released 11 studio albums, five compilation albums, four EPs, and 50 singles. Twenty-seven of his singles went to #1 on the country music charts. Shelton has sold more than 10 million records worldwide, and has won six Academy of Country Music Awards, eight American Country Awards, two American Music Awards, 27 ASCAP Awards, one Billboard Music Award, 27 BMI Awards, and 11 Country Music Association Awards. He also has been a coach on the popular television talent show, The Voice, for 18 seasons. Shelton still records and tours.
