It Was Good Living With You, (W)aha - Understanding Permian Gas Takeaway Capacity at Waha Hub, Part 3

Booming Permian natural gas production has increasingly stressed pipeline takeaway in recent months as volume rose to more than 6 billion cubic feet per day (Bcf/d) — up almost 1 Bcf/d from the year-ago level. The production surge has broadened price spreads not only between Waha and other regional hubs, but also within the Permian between Waha and its sister hub, the El Paso Pipeline-Permian price pool. Creative midstream solutions are aimed at relieving these constraints, both in the form of long-haul takeaway and intrabasin pipelines. Of the latter form, few projects have moved with the speed and size of WhiteWater Midstream’s Agua Blanca. Today we continue our series on the Waha Hub with a look at intrabasin Permian midstream gas flows and how Agua Blanca is expected to keep them moving.

NATGAS Permian Report

The NATGAS Permian Report is a weekly natural gas fundamentals analysis focusing entirely on the key market drivers within the Permian basin. The report contains details and forecasts around natural gas production, demand, and pricing. It offers a summary of pipeline outflows and capacities from the Permian to neighboring regions, outlining the key shifts in flows to the West, MidCon, and Texas intrastate markets.

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In Part 1 and Part 2 of this series we highlighted how Permian gas flows to the Waha Hub and explored the paths out of the basin. We also covered how all of the new takeaway projects are aimed at moving gas either south to Mexico or east into Texas intrastate markets. In that analysis, we only touched on the link between Waha and the second major pricing point in the Permian, the El Paso Pipeline’s Permian pricing pool. An understanding of the pricing and gas flow dynamics of this interconnect sheds light on the market need for Agua Blanca and projects like it.

Platts defines the “El Paso, Permian Basin” pricing point as deliveries into the El Paso Natural Gas system in the Permian from three pools: the Waha plant south (Waha Pool), the Keystone station south to Waha (Keystone Pool) and the Plains station south to Keystone (Plains Pool). We’ve simplified that description in Figure 1, where the red circle indicates the general location of the El Paso Permian pool. The yellow circle shows the location of Waha and the double black arrow highlights how gas flows between the El Paso Pipeline and the hubs at Waha. 

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