New Pipeline Projects Set To Increase Permian's Natural Gas Takeaway Capacity
A fresh batch of expansions and a new pipeline are set to provide operators offtake options.
Five recently announced natural gas pipeline projects, if completed as planned, are expected to increase the Permian Basin’s takeaway capacity by a combined 4.18 Bcf/D over the next 2 years, the US Energy Information Administration (EIA) said on 4 August.
Four of the five projects will expand the capacity of existing pipelines, with the construction of a new pipeline rounding out the slate of announced projects.
The Matterhorn Express Pipeline, a joint venture between WhiteWater, EnLink Midstream, Devon Energy Corp, and MPLX, is a planned 490-mile-long pipeline that will be able to transport up to 2.5 Bcf/D of natural gas from the Waha Hub in West Texas to Katy, Texas.
The pipeline will receive natural gas from upstream Permian connections and from direct connections at processing facilities in the Midland Basin before connecting to the Agua Blanca Pipeline. The pipeline is expected to enter service in the third quarter of 2024.
Three of the expansion projects are expected to enter service in the latter half of 2023.
Kinder Morgan announced in May that its Gulf Coast Express Pipeline Expansion will expand compression on the pipeline to increase natural gas deliveries to South Texas markets, increasing capacity by 0.57 Bcf/D to 2.55 Bcf/D. The project is expected to enter service in December 2023.
The company reached a final investment decision in late June to expand compression of its Permian Highway Pipeline to increase natural gas deliveries from the Waha area to multiple mainline connections to Katy, Texas, and various US Gulf Coast markets. The project will increase capacity by 0.55 Bcf/D to 2.65 Bcf/D. The project is expected to enter service in November 2023.
WhiteWater and MPLX, a joint venture between Stonepeak and West Texas Gas, announced on 2 May its Whistler Pipeline Capacity Expansion. The project will expand compression by installing three new compressor stations on the pipeline, increasing capacity by 0.5 Bcf/D to 2.5 Bcf/D. The project is expected to enter service in September 2023.
Additionally, the Oasis Pipeline Modernization Project is under construction and is expected to be completed by the end of 2022. It will modernize and optimize Energy Transfer’s existing Oasis Pipeline, providing an additional 0.06 Bcf/D of Permian takeaway capacity.
These projects will help to further expand natural gas pipeline exports from the West Texas region of the US.
In its weekly natural gas report, the EIA noted that exports from the Permian to Mexico averaged 1.6 Bcf/D in May 2022—the highest level of pipeline exports from West Texas on record, according to its most recent monthly data.
“Compared with the 2021 annual average, US pipeline exports from West Texas increased by 12% from January through May 2022 and averaged 1.4 Bcf/D over this five-month period,” the EIA said.
According to the EIA, US natural gas pipeline exports from West Texas to Mexico have been growing in recent years, from 0.6 Bcf/D in 2019 to 1.2 Bcf/D in 2021, and to 1.4 Bcf/D on average from January through May 2022. The EIA attributed the growth in natural gas demand, particularly in Mexico's power and industrial sectors, as contributing to the growth in pipeline exports from the US.