September 11, 2024 [Oilprice]- Natural gas pipeline capacity in the Permian Basin is gearing up for significant gains with the upcoming launch of the Matterhorn Express Pipeline.

The 2.5 billion cubic feet per day (Bcf/d) pipeline, expected to begin service this month, was developed by a joint venture including EnLink Midstream, Whitewater, Devon Energy, and MPLX, and will transport gas from the Permian Basin to Katy, near Houston, Texas.

Natural gas production from the Permian Basin, the basin primarily associated with growing oil output, has more than doubled since 2018. This surge has reduced regional natural gas prices, particularly at the Waha Hub, where prices have been negative for much of 2024. Prices at the Waha Hub have been below zero nearly half of all 2024 trading days, and hit a low of -$6.41 per MMBtu in late August, according to Natural Gas Intelligence data cited by the EIA.

To address these price challenges at the Waha Hub, additional pipeline projects are in development. Three major projects—Apex Pipeline (2.0 Bcf/d), Blackcomb Pipeline (2.5 Bcf/d), and Saguaro Connector Pipeline (2.8 Bcf/d)—are set to add 7.3 Bcf/d of capacity by 2027. These pipelines will help transport Permian gas to various Texas and Mexican markets, alleviating bottlenecks.

“Pipeline operators have also announced other projects with a total capacity of 7.0 Bcf/d designed to transport natural gas from the Permian Basin to demand centers in Mexico and along the Texas Gulf Coast. These projects, if realized, could come into service between 2025 and 2028,” the EIA said on Tuesday.

With these new pipelines coming online, the increased takeaway capacity should relieve pressure on local prices and narrow the gap between the Waha Hub and Henry Hub. This development is expected to bring much-needed stability to Permian producers and support more sustainable regional pricing dynamics.