Permian Gas Production to Increase

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Enterprise Products Partners said the gas-to-oil ratio in the Permian Basin is changing so that it's yielding more natural gas. The company has touted its success in the basin for at least a year.

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Gas Production up 5.2%

Natural gas production in the southern United States is expected to accelerate as the nature of the legacy oil pools changes, Enterprise Products Partners said.

Reporting Tuesday on its fourth-quarter 2026 results, the midstream company said it saw a 6% increase year-on-year in piped natural gas volumes through the three-month period ending Dec. 31. At 8.1 billion cubic feet per day (Bcf/d), processed natural gas levels, meanwhile, were up 5.2% from the same period in 2024.

Jim Teague, the co-chief executive of the company's general partner, said the 8.1 Bcf/d in processing was a record for the company, supported in part by growth in the Permian Basin.

The Permian is the largest inland shale oil producer in the U.S., with production expected to average 6.6 million barrels per day (BBL/d). But it's starting to yield more gas because, as pressure changes due to field maturation, heavier molecules associated with crude oil remain trapped in subsurface pores, while natural gas continues to escape.

For Enterprise, that means even more natural gas and natural gas liquid (NGL) production.

"We continue to forecast strong natural gas and NGL production growth in the Permian Basin as gas-to-oil ratios continue to increase and as producers use new completion technology, develop new geologic horizons, and step out further on their inventory of locations," he said. "This natural gas and NGL production growth is expected despite moderating crude oil production growth in the Permian Basin."

Levels for both piped natural gas volumes and processed natural gas, however, remained relatively unchanged from the third quarter. Early-year federal estimates, meanwhile, show Permian crude oil production is on pace for a 1% decline to 6.52 million BBL/d, while natural gas production is expected to increase by 1.7% to average 29.5 Bcf/d by next year.

That was enough for Enterprise, however, to add takeaway capacity to its Bahia pipeline for natural gas liquids.

The pipeline transports gas from the Permian to a fractionation complex in Mont Belvieu, Texas. With operations starting up in December, the company said it already sold off a 40% interest in the pipeline to Exxon Mobil Corporation.

"This sale comes in connection with an announcement to expand Bahia's capacity to 1 million BBL/d and to extend the pipeline to Exxon's Cowboy natural gas processing complex in Eddy County, New Mexico," Teague said. "These expansion and extension projects are scheduled to be completed in the fourth quarter of 2027."

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipelines Project and Plant databases can learn more about the Bahia pipeline--including capacities, investment values and necessary equipment--in a detailed project report.

Permian Providing Legacy Support

Permian production trends have been a theme for Enterprise for at least a year. All of its metrics, from gas processing inlet volumes to pipeline volumes, posted year-on-year gains to early 2025 at least.

Enterprise realized a natural gas price of $3.55 per million British thermal units (MMBtu) during the fourth quarter, compared to $2.27 per MMBtu during the same period in 2024. Henry Hub, the U.S. benchmark for the price of natural gas, averaged $3.66 per MMBtu last year, according to federal estimates.

By the Numbers

• 5.2% increase in processed gas volumes
• $3.55 per MMBtu realized in Q4
• 29.5 Bcf/d expected in Permian gas this year

Net income of $1.66 billion for the just-ended quarter was relatively unchanged from fourth quarter 2024 levels. Full-year 2025 net income of $5.87 billion marked a 1.5% decline from the prior year.

On spending, more than 75% of its capital investments of $5.6 billion last year was targeted for growth projects, including $632 million spending in the Permian, the company reported. For this year, Enterprise said that "organic growth capital investments, net of proceeds from asset sales, are expected to be in the range of $1.9 billion to $2.3 billion in 2026."

Industrial Info is tracking 21 active Enterprise Products capital projects, with a total investment value of $6.71 billion. GMI subscribers can learn more from a list of detailed project reports.

U.S. natural gas production, meanwhile, is rebounding from the early-year bout of harsh winter weather. Arctic air and heavy snows pummeled states east of the Mississippi River, while parts of Louisiana, Mississippi and Texas struggled under sub-freezing temperatures, forcing some pipeline curtailments.

On January 18, during the worst of the latest storm, IIR Energy's production estimate was around 94.58 Bcf. By Tuesday, that level had rebounded to around 105 Bcf/d so far this week. Subscribers have access to the NATGAS Today report.

Key Takeaways

• Permian continues to pay off for Enterprise.
• Maturation means the basin is yielding more natural gas.
• The company expanded capacity on its Bahia pipeline.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).