More, More, More - Permian Gas Production Growth Spurs Still More Infrastructure Projects

In early December, natural gas production in the Permian has been averaging a record 14.2 Bcf/d, a gain of 1 Bcf/d in only six months. That rapid pace of growth is putting pressure on every aspect of midstream infrastructure — gas gathering systems, processing plants, and takeaway pipelines — and resulting in a variety of efforts aimed at ensuring there will be sufficient capacity in place to support the increasing gas volumes being produced. New gas-gathering mileage is being added, some new processing plants are being built, and at least a couple of new large-diameter pipelines from the Permian to the Gulf Coast are being considered. However, reflecting the midstream sector’s financial discipline, there’s also a big push to make fuller use of existing assets, in some cases by relocating processing plants, compressors, and other assets to where they are needed most. In today’s RBN blog, we discuss the latest gas-related infrastructure developments in the Permian’s Midland and Delaware basins.

As we said a few months ago in One Step Ahead, Permian natural gas production has roughly doubled in the past four years, spurring the build-out of billions of dollars in gas-related assets. These projects include innumerable miles of new gathering pipeline, more than new 50 gas processing plants, and a number of new takeaway pipelines, most recently the 2.1-Bcf/d Permian Highway Pipeline and the 2-Bcf/d Whistler Pipeline, which started up in January and July of this year, respectively.

There also have been two pipeline additions within the Permian this fall. In October, Energy Transfer completed its Permian Bridge project, which involved the conversion of 55 miles of an existing 24-inch-diameter NGL pipeline between the Midland and Delaware basins to rich-gas service. Permian Bridge now enables 115 MMcf/d of associated gas with high NGL content to be transported from the Midland to underutilized processing plants in the Delaware. Energy Transfer noted during its November 3 earnings call that the pipeline’s capacity could easily be expanded to 200 MMcf/d. In mid-November, a 70/30 joint venture of Summit Midstream Partners and ExxonMobil’s XTO Energy started up its 1.35-Bcf/d Double E Pipeline, which runs 135 miles from the Eddy/Lea county line in New Mexico to the Waha gas hub in Pecos County, TX. Summit Midstream has said that pipeline will run near about 30 processing plants with a combined capacity of about 10 Bcf/d.

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