One of the biggest constraints has been limited pipeline capacity, leading to price volatility at the Waha Hub, the region’s primary natural gas pricing point. At times, excess supply and transportation bottlenecks have resulted in negative natural gas prices, forcing producers to either accept steep discounts or flare gas, both of which impact profitability and regulatory compliance.
Energy Transfer’s Strategic Expansion in Permian Gas Takeaway
Energy Transfer (ET) is actively addressing these bottlenecks through a series of midstream infrastructure expansions, ensuring efficient gas movement from production fields to high-value markets. Key projects include:
1. Enhancing Permian-to-Waha Connectivity
The 67-mile pipeline from Panther Gas Plant to Waha Hub recently approved by the Texas Railroad Commission (RRC) is a major component of ET’s expansion strategy. This project:
- Transports processed natural gas from the Panther Gas Plant to Waha Hub.
- Alleviates regional bottlenecks and improves pricing stability at Waha.
- Enhances takeaway options for producers in the Midland and Delaware Basins.
RRC Permit Overview
Additional gathering and processing expansions include:
- Panther Gas Plant (Newly operational)
- Bear Processing Plant (200 MMcf/d, in service Q2 2023)
- Grey Wolf Processing Plant (200 MMcf/d, in service since Dec 2022)
2. Expanding Gas Takeaway from Waha Hub
Once natural gas reaches Waha Hub, Energy Transfer provides multiple pipeline options to deliver it to key demand centers:
A. Gulf Coast & U.S. Demand Centers
ET is developing an intrastate pipeline from the Midland Basin to the Gulf Coast, connecting Waha gas to Houston, Beaumont, and Carthage hubs. This project integrates into ET’s vast network, ensuring:
- Reliable supply to Gulf Coast LNG export facilities.
- Direct delivery to major industrial and power generation markets.
Another important infrastructure upgrade is the Oasis Pipeline Modernization, which has recently added 60,000 Mcf/d of new capacity, reducing constraints in the region.
B. Waha to Mexico Exports
Mexico is a growing market for U.S. natural gas, relying on it for power generation and industrial use. Energy Transfer operates two major pipelines facilitating this cross-border trade:
- Trans-Pecos Pipeline (1.4 Bcf/d capacity)
- Comanche Trail Pipeline (1.1 Bcf/d capacity)
Together, these pipelines transport 2.5 Bcf/d of Permian gas to Mexico, reinforcing Energy Transfer’s strategic role in supplying international markets.
C. Waha to U.S. LNG Export Facilities
With global LNG demand surging, ET’s pipeline network plays a key role in supplying liquefaction facilities along the Gulf Coast. Notable connections include:
- Gulf Run Pipeline (1.65 Bcf/d) – Directly linked to Golden Pass LNG (ExxonMobil & QatarEnergy).
- TGP & NET Mexico Pipelines – Facilitating deliveries to Corpus Christi and Brownsville LNG terminals.
Market Impact of Energy Transfer’s Expansion
These infrastructure enhancements will have profound effects on the Permian Basin’s gas market:
1. Stabilized Waha Gas Pricing
- More takeaway capacity reduces price volatility and negative pricing events.
- Higher realized prices improve producer margins and midstream profitability.
2. Reduced Gas Flaring and Regulatory Compliance
- Expanding pipeline capacity provides an alternative to gas flaring.
- Supports operators in meeting stricter Texas and New Mexico environmental regulations.
3. Strengthened U.S. Energy Export Competitiveness
- Increased pipeline capacity ensures Permian gas reaches global LNG markets.
- Enhances U.S. energy security and export flexibility to Europe and Asia.
Final Thoughts
Energy Transfer’s continued investment in Permian gas takeaway infrastructure is crucial for ensuring the efficient transport of natural gas, mitigating price volatility at the Waha Hub, and strengthening the U.S. role in global energy markets. The 67-mile Panther-to-Waha pipeline and other expansions demonstrate a long-term commitment to optimizing midstream logistics, supporting domestic energy security, and expanding international market access.
As pipeline capacity increases, Permian producers will benefit from improved price stability and reduced flaring constraints, reinforcing the region’s position as a leading supplier of natural gas to North America and the world.
