Midstream operators in the Permian Basin are rapidly expanding natural gas processing capacity to keep pace with the region’s anticipated production growth. As the basin continues to experience infrastructure challenges, particularly in processing and egress capacities, companies are investing heavily in new facilities and system expansions. These developments aim to alleviate bottlenecks that have led to issues such as price dips, production shut-ins, and increased flaring, ensuring that the infrastructure can support the ongoing boom in natural gas production.
Brazos Midstream Developments:
- Completed 200 MMcf/d Sundance I cryogenic processing facility in Martin County, set to start in October 2024.
- Began construction on Sundance II, a 300 MMcf/d plant, expected to be operational by the end of 2025.
- Expanding Midland Basin gathering system with 175 miles of new lines, increasing total system to 260 miles.
Targa Resources Expansion:
- Building nearly 1.4 Bcf/d in new processing capacity across the Midland and Delaware basins.
- Multiple plants under construction, with significant capacity expected online between 2024 and 2026.
Enterprise Products Partners:
- Adding 900 MMcf/d of processing capacity by 2026 across three plants.
Kinetik & Energy Transfer:
- Kinetik expanding processing capacity in New Mexico, aiming for 700 MMcf/d by 2026.
- Energy Transfer increasing capacity with new plants and relocating existing plants to the Delaware Basin.
EnLink Midstream & Others:
- EnLink placed a 150 MMcf/d plant into service in May 2024; further expansions planned.
- Western Midstream and MPLX each have new plants expected in service by 2025.
Infrastructure Strains:
- Current processing capacity limitations causing price dips, shut-ins, and flaring in the Midland Basin.
- The Matterhorn pipeline, expected in service in September, will help alleviate egress capacity issues.
The aggressive expansion of natural gas processing capacity in the Permian Basin highlights the industry’s proactive approach to addressing current infrastructure challenges. With multiple midstream operators investing in new facilities and system upgrades, the region is poised to better handle the anticipated surge in production. While issues like processing bottlenecks and egress capacity constraints have posed significant challenges, these ongoing efforts are expected to provide the necessary infrastructure to support sustained growth. As new plants come online and pipelines like the Matterhorn begin service, the Permian Basin will be better equipped to maintain its role as a key driver of the U.S. energy supply.
