Permian pipeline construction is entering a new era. With numerous LNG terminals slated to expand exports along the US Gulf Coast through the end of this decade, the need to link Permian gas supplies to these facilities has never been greater. While there have been three pipelines built outside the Permian in the past five years, with a fourth on the way in 2024, each has ended in the same general area west of Houston or further south near Corpus Christi. However, market needs are changing, with most of the next wave of LNG export capacity to be added east of Houston, closer to Beaumont and in southeast Louisiana, and these facilities want access to Permian gas. As a result, we were not surprised this month when two new proposals were announced to directly link gas from West Texas markets to these export terminals. If built, Targa Resources’ Apex and WhiteWater Midstream Blackfin projects could significantly alter Texas gas markets and how Permian supplies are moved to their final destination. In today’s RBN blog, we look at the latest developments in Texas pipeline infrastructure.
The Permian natural gas markets have been in steady growth mode for more than five years, providing a wealth of interesting topics to discuss on RBN’s blogs and weekly. NATGAS Permian report, from negative gas prices to massive construction of long-haul pipeline infrastructure. That said, it’s been a little quiet in the Permian lately. While output growth remains firmly intact (see our Permian 2023 perspectives), negative prices in Waha have not been that common of late, and the Waha base has been relatively strong by recent historical standards. Infrastructure news has also been somewhat sparse in recent months, after an active 2022 saw 2.5 Bcf/d Matterhorn Express receive a positive Final Investment Decision (FID), in addition to sanctioning the 500 MMcf/d Whistler expansion and the 550 MMcf/d Permian Highway (PHP) pipeline expansion. However, activity may be about to pick up.
Before we get into today’s blog, we need to issue a disclaimer. Neither of the two new pipelines we are discussing today has received public approval from their sponsors. Rather, the only publicly available information we have about them comes from our search of the Texas Railroad Commission’s (RRC) pipeline permit database, which indicates that both Targa and WhiteWater issued applications during the first trimester. We would note that the mere existence of an RRC permit application, called a T-4, does not mean that a pipeline will go forward. Still, the information contained in T-4 gives us a first look at the route of a potential pipeline, providing potentially valuable information about the project’s impact. Armed with this information, we look at how Targa’s Apex and WhiteWater’s black fin could fit into the Permian and Gulf Coast gas markets.
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