Life in the Fast Lane - New Permian Gas Pipeline Matterhorn Express Takes FID

The race is heating up for building natural gas pipeline takeaway capacity out of the Permian. Associated gas production from the crude-focused basin is at record highs this month and gaining momentum, which means that without additional pipeline capacity, the Permian is headed for serious pipeline constraints — and potentially negative pricing — by late this year or early next, which would, in turn, limit crude oil production growth there. Midstreamers are jockeying for the pole position to move surplus gas from the increasingly constrained basin to LNG export markets along the Gulf Coast. One of the contenders, Matterhorn Express Pipeline (MXP), a joint venture (JV) between WhiteWater, EnLink Midstream Partners, Devon Energy and MPLX, announced its final investment decision (FID) late yesterday. In today’s RBN blog, we provide new details on the greenfield project.

In our Run for the Roses blog a couple of weeks ago, we laid out what we knew about the field of gas pipeline projects entering this summer’s race to increase egress out of the Permian. To recap, at the time there were three greenfield projects percolating: Kinder Morgan’s Permian Pass, which is assumed to be a 2.0-Bcf/d pipeline that would terminate near the Katy, TX, area; Energy Transfer’s Warrior Pipeline, which would move 1.5-2 Bcf/d of gas east from the Permian toward the Dallas area, where it would then access existing pipes to the Gulf Coast; and the focus of today’s blog, Matterhorn Express Pipeline (MXP), which would head east out of the basin toward Katy. (See Run for the Roses for a map of these projects.)

In addition to these greenfield projects, a slew of brownfield expansions has cropped up as well. On its recent quarterly earnings call, Kinder Morgan course-corrected somewhat, announcing that it was less likely to build Permian Pass and would place better odds on moving forward with expansions of its existing systems: the Permian Highway (PHP) and Gulf Coast Express (GCX) pipelines. On April 25, Kinder formally announced a binding open season for an incremental 650 MMcf/d of capacity on PHP that would target an October 2023 startup. Not to be outdone, another cross-state system — Whistler Pipeline — issued a press release on May 2, saying it is expanding its capacity by 500 MMcf/d to 2.5 Bcf/d by September 2023. Note that Whistler is backed by WhiteWater and its partners: MPLX, West Texas Gas (WTG) and Stonepeak. Also note that Whistler says it has made an FID to proceed with the Whistler Expansion.