Kinder Morgan’s expansion of the Permian Highway Pipeline is officially pushing more natural gas from West Texas to the Gulf Coast—about 550 MMcf/d more—since the beginning of December.

Kinder Morgan CEO Kimberly Dang noted the project was operational during the Wells Fargo Midstream and Utilities Symposium on Dec. 7, while answering a question about whether another gas pipeline from the Permian to the Gulf is needed in the near future.

“You’ve got capacity coming into the market now,” Dang said. “That’s why we believe that it’ll be the back half of the decade before you see the need for a brand-new green field pipe.”

Over the last four months, more than 1 Bcf/d of natural gas capacity has been added to take natural gas from the Permian to processing and export facilities on the Gulf Coast. In September, MPLX announced the completion of the Whistler pipeline expansion, adding 500 MMcf/d for a total capacity of 2.5 Bcf/d. The Whistler runs from the Waha Hub  in Pecos County, Texas, to Agua Dulce, Texas, with connections to Corpus Christi.

The 430-mile PHP also runs from Waha and terminates close to Katy, Texas, where it supplies terminals along the Gulf Coast. KMI expanded capacity to the line by adding compression, driving the volume the line can handle from 2.1 Bcf/d to 2.65 Bcf/d.

Whitewater’s Matterhorn Express Pipeline is expected to be completed in third-quarter 2024 and will add another 2.5 Bcf/d of capacity from the Permian to the Texas Gulf Coast.

Last year, natural gas production in the Permian Basin set a record of an average of 21 Bcf/d, according to the U.S. Energy Information Administration (EIA). The EIA noted production rose because associated natural gas—produced primarily from oil wells—has tripled in the basin since 2018 and reached 13.7 Bcf/d in the first seven months of 2023.

Dang said that the extra capacity just added, or that will be coming online shortly, is not a threat to overload gas facilities along the coast. The extra gas should be balanced out by demand, and there’s not an immediate need for another gas pipeline.

“There’s going to be a supply-push, but there’s also probably going to be a demand-pull there as a result of the LNG exports,” she said.  “And so I think [a new pipeline] is something that is still definitely on the table. It’s just there’s not because it’s farther out—you don’t hear people talking about it as much on a daily basis.”

Five LNG export projects, all on the Gulf Coast, are currently under construction in the U.S.

The EIA estimates the projects will add 9.7 Bcf/d of LNG export capacity by 2027. The $10 billion Exxon Mobil Golden Pass LNG project in Sabine Pass, Texas, and Venture Global’s $21 billion Plaquemines LNG project south of the Port of New Orleans are both expected to come online in 2025.  

Comments