Natural gas takeaway capacity in the Permian Basin is set to receive a significant boost with the upcoming launch of the Matterhorn Express Pipeline and several other major pipeline projects. As natural gas production in the region continues to grow, particularly from associated gas linked to oil operations, these new infrastructure developments aim to alleviate price pressures and improve market access. The Matterhorn Express Pipeline, along with the Apex, Blackcomb, and Saguaro Connector pipelines, will provide a much-needed increase in capacity, helping to stabilize prices and support the growing demand for natural gas transportation to key markets across Texas and Mexico.
Project Summary
Matterhorn Express Pipeline: Begins service in September 2024, transporting 2.5 Bcf/d of natural gas from the Permian Basin to Katy, near Houston.
Key stakeholders: Joint venture between Whitewater, EnLink Midstream, Devon Energy, and MPLX.
Purpose: Address increased associated gas production from oil operations in the Permian and reduce regional spot price pressures.
Upcoming pipeline projects:
- Apex Pipeline: 2.0 Bcf/d, from Permian to Port Arthur, Texas, operational by 2026.
- Blackcomb Pipeline: 2.5 Bcf/d, from Permian to Agua Dulce, Texas, operational by 2026.
- Saguaro Connector Pipeline: 2.8 Bcf/d, from Permian to U.S.-Mexico border, operational by 2027–28.
Total new capacity: Combined 7.3 Bcf/d from these projects.
Spot price impact:
- Waha Hub prices have been below zero for 46% of trading days in 2024 due to capacity constraints.
- Prices at Waha Hub averaged $2.07 below Henry Hub prices in 2024, compared to 42 cents below in 2021.
Expected outcome: New takeaway capacity should ease price constraints at Waha Hub, improving natural gas pricing and narrowing the price difference with Henry Hub.
In conclusion, the expansion of natural gas pipeline takeaway capacity in the Permian Basin through the Matterhorn Express Pipeline and upcoming projects like the Apex, Blackcomb, and Saguaro Connector pipelines will play a critical role in addressing the region’s transportation bottlenecks. These developments are expected to reduce the price volatility at the Waha Hub, improve market access, and support the continued growth of natural gas production. As these pipelines come online, they will not only benefit producers by increasing delivery capacity but also stabilize prices, making the Permian Basin a more competitive and sustainable source of natural gas for the U.S. and international markets.
