January 22, 2021 – Natural Gas World
US Permian pipe relaunch [NGW Magazine]
By: Anna Kachkova
RECOVERY UNDERWAY
An often-cited fact about the Permian is that gas from the basin is largely a by-product of drilling for oil, and producers thus focus on their oil operations but also have to deal with their booming gas output. Indeed, prior to the Covid-19 pandemic, rates of flaring of associated gas were reaching record highs, and pipeline operators were scrambling to propose easing the problem with new takeaway capacity.
This also makes Permian gas particularly vulnerable to oil price fluctuations, and indeed, as the collapse of crude prices that started in March 2020 prompted drillers in the basin to shut in production, gas output fell too. Consultancy RBN Energy estimates that at one point last year, Permian production declined by almost 2bn ft³/day. However, it was also quick to rebound as crude prices stabilized in the second half of 2020 and curtailments were eased.
RBN estimates that production is now around 11.7bn ft³/day – around 2% below what it was last year – but adds that it expects the Permian to be one of the few basins in the US that will see any growth in gas volumes this year at all.
This is attributed in part to the start-up of Permian Highway, which RBN believes ramps up competition for Permian supplies because it is now significantly easier to send growing gas volumes out of the basin. The consultancy noted that gas prices at the Waha hub in Texas were bolstered when the pipeline entered interim service in late 2020, having previously turned negative on occasion.
Read the full article here: https://www.naturalgasworld.com/us-permian-pipe-relaunch-ngw-magazine-84767
