Three new Permian Basin pipeline projects with a combined capacity of 7.3 Bcf/d could be online by 2027, according to the U.S. Energy Information Administration (EIA), allowing for West Texas natural gas to reach both coasts in Mexico.
The pipeline projects would provide much needed capacity relief to Permian producers who have often been forced to sell their natural gas at a discount as supply outstrips methods to deliver the fuel to customers.
A key natural gas index in West Texas traded in negative territory through most of the spring and summer, with producers forced to pay to have excess supply taken away and often stored underground. The hub, Waha, on Friday (Sept. 13) averaged 7.0 cents/MMBtu, according to NGI data. It sank to an all-time average low of negative $6.410 on Aug. 29.