The Permian natural gas pipeline build-out is entering a new era. With numerous LNG terminals set to expand exports along the U.S. Gulf Coast through the end of this decade, the need to link Permian gas supply to those facilities has never been greater. While there have been three greenfield pipelines built out of the Permian in the last five years, with a fourth on the way in 2024, each has ended in the same general area west of Houston or farther south near Corpus Christi. However, market needs are shifting, with most of the next wave of LNG export capacity to be added east of Houston, closer to Beaumont and in southeastern Louisiana, and those facilities want access to Permian gas. As a result, we weren’t surprised this month when two new proposals to directly link gas from West Texas markets to those export terminals were announced. If built, Targa Resources’ Apex and WhiteWater Midstream’s Blackfin projects could significantly alter Texas gas markets and how Permian supplies move to their final destination. In today’s RBN blog, we look at the latest developments in Texas gas pipeline infrastructure.
Permian natural gas markets have been in steady growth mode for over five years now, providing a plethora of interesting topics to discuss in blogs and in RBN’s weekly NATGAS Permian report, from negative gas prices to a massive long-haul pipeline infrastructure build-out. That said, it has been somewhat quiet in the Permian lately. Though production growth remains firmly intact (see our 2023 Permian Outlook), negative prices at Waha haven’t been all that common of late and Waha basis has been relatively strong by recent historical standards. Infrastructure news has also been a little scarce the past few months, after an active 2022 saw the 2.5 Bcf/d Matterhorn Express receive a positive final investment decision (FID), in addition to the sanctioning of the 500 MMcf/d Whistler Expansion and the 550 MMcf/d Permian Highway Pipeline (PHP) Expansion. However, activity may be about to pick up.
Before we dive into today’s blog, we need to issue a disclaimer. Neither of the two new pipelines we are discussing today have publicly received approval from their backers. Rather, the only publicly available information we have on them comes from our scouting of the Texas Railroad Commission’s (RRC) pipeline permit database, which indicates that both Targa and WhiteWater posted applications during the first quarter. We would note that the mere existence of an RRC permit application, called a T-4, does not mean a pipeline will move forward. Still, the information contained in the T-4 does give us a first look at a prospective pipeline’s route, providing potentially valuable insights into the project’s impact. Armed with that information, let’s look at how Targa’s Apex and WhiteWater’s Blackfin might integrate into the Permian and Gulf Coast gas markets.
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