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Released June 10, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--New natural gas pipelines in Texas and Mexico have increased takeaway capacity from the Waha Hub in West Texas, thus narrowing the price gap between the Waha Hub and the Henry Hub, notes the U.S. Energy Information Administration (EIA).
"Since October 2020, two completed projects in Texas and two completed projects in Mexico have increased the Waha Hub's connectivity to demand markets and, in turn, reduced the price difference between natural gas at the Waha Hub and the Henry Hub," the EIA said in its Tuesday Today in Energy release.
Located near production activities in the Permian Basin, the Waha Hub had been beset by constrained takeaway capacity for several years, keeping Waha prices at $1 per million British thermal units (Btu) or more below the Henry Hub price. The price gap began to narrow in October and has continued to shrink with the new pipelines going into service. Most of the natural gas produced in the region is associated gas from oil-related drilling in the Permian.
In January, Kinder Morgan's (NYSE:KMI) (Houston, Texas) 2.1 billion-cubic-foot-per-day (Bcf/d) Permian Highway Pipeline (PHP) and Whitewater/MPLX's 1.8 Bcf/d Agua Blanca Expansion Project both entered service.
The PHP moves natural gas from the Waha Hub to Katy, Texas, and also connects to Mexico. For more information, see January 5, 2021, article - Kinder Morgan Begins Commercial Operations on Permian Highway Pipeline, Takes Hard Look at Other Big Projects.
The Agua Blanca expansion connects to nearly 20 natural-gas processing sites in the Delaware Basin and can move 1.8 Bcf/d of natural gas to the Waha Hub. By the third quarter of this year, the project likely will expand to connect with the Whistler Pipeline to move an additional 2.0 Bcf/d of natural gas from the Permian Basin to the Texas Gulf Coast.
Whistler Pipeline LLC, a consortium of Whitewater Midstream (Austin, Texas), MPLX LP (NYSE:MLPX) (Findlay, Ohio), Stonepeak Infrastructure Partners (New York, New York) and West Texas Gas Incorporated (Midland, Texas), is continuing construction on the 450-mile, 42-inch diameter Whistler Pipeline. The pipeline is scheduled to begin service in the third quarter and will transport natural gas from an interconnect with the Waha Header near Coyanosa, Texas, to a terminus near Agua Dulce, Texas, providing direct access to South Texas markets. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Database can click here for a list of related projects.
The recent completion of two other pipeline systems in Mexico, with a combined capacity of 1.4 Bcf/d, increases the flow of natural gas from the Permian Basin to parts of Mexico, the EIA said, contributing to a nearly 10% increase in U.S. pipeline exports to Mexico since March 2020.
Industrial Info is tracking other Waha Hub natural gas pipeline projects under development, including the Bluebonnet Express Pipeline by Transcontinental Gas Corporation, a subsidiary of Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma). The proposed 500-mile pipeline would move up to 2 Bcf/d of natural gas from the Waha Hub near Fort Stockton, Texas, to Katy. The natural gas would then enter Transco's Zone 2 mainline, which covers the northern half of the Texas Gulf Coast. at this time, however, the project remains in the market analysis phase. For more information, click here for a list of related project reports.
Oil and gas market uncertainty, along with concerns that takeaway capacity could be overbuilt, could hinder future development.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
"Since October 2020, two completed projects in Texas and two completed projects in Mexico have increased the Waha Hub's connectivity to demand markets and, in turn, reduced the price difference between natural gas at the Waha Hub and the Henry Hub," the EIA said in its Tuesday Today in Energy release.
Located near production activities in the Permian Basin, the Waha Hub had been beset by constrained takeaway capacity for several years, keeping Waha prices at $1 per million British thermal units (Btu) or more below the Henry Hub price. The price gap began to narrow in October and has continued to shrink with the new pipelines going into service. Most of the natural gas produced in the region is associated gas from oil-related drilling in the Permian.
In January, Kinder Morgan's (NYSE:KMI) (Houston, Texas) 2.1 billion-cubic-foot-per-day (Bcf/d) Permian Highway Pipeline (PHP) and Whitewater/MPLX's 1.8 Bcf/d Agua Blanca Expansion Project both entered service.
The PHP moves natural gas from the Waha Hub to Katy, Texas, and also connects to Mexico. For more information, see January 5, 2021, article - Kinder Morgan Begins Commercial Operations on Permian Highway Pipeline, Takes Hard Look at Other Big Projects.
The Agua Blanca expansion connects to nearly 20 natural-gas processing sites in the Delaware Basin and can move 1.8 Bcf/d of natural gas to the Waha Hub. By the third quarter of this year, the project likely will expand to connect with the Whistler Pipeline to move an additional 2.0 Bcf/d of natural gas from the Permian Basin to the Texas Gulf Coast.
Whistler Pipeline LLC, a consortium of Whitewater Midstream (Austin, Texas), MPLX LP (NYSE:MLPX) (Findlay, Ohio), Stonepeak Infrastructure Partners (New York, New York) and West Texas Gas Incorporated (Midland, Texas), is continuing construction on the 450-mile, 42-inch diameter Whistler Pipeline. The pipeline is scheduled to begin service in the third quarter and will transport natural gas from an interconnect with the Waha Header near Coyanosa, Texas, to a terminus near Agua Dulce, Texas, providing direct access to South Texas markets. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Database can click here for a list of related projects.
The recent completion of two other pipeline systems in Mexico, with a combined capacity of 1.4 Bcf/d, increases the flow of natural gas from the Permian Basin to parts of Mexico, the EIA said, contributing to a nearly 10% increase in U.S. pipeline exports to Mexico since March 2020.
Industrial Info is tracking other Waha Hub natural gas pipeline projects under development, including the Bluebonnet Express Pipeline by Transcontinental Gas Corporation, a subsidiary of Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma). The proposed 500-mile pipeline would move up to 2 Bcf/d of natural gas from the Waha Hub near Fort Stockton, Texas, to Katy. The natural gas would then enter Transco's Zone 2 mainline, which covers the northern half of the Texas Gulf Coast. at this time, however, the project remains in the market analysis phase. For more information, click here for a list of related project reports.
Oil and gas market uncertainty, along with concerns that takeaway capacity could be overbuilt, could hinder future development.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
