MIDLAND, Texas—With the Matterhorn Express online and two other gas pipeline projects on the way, has the Permian solved its egress problems?

“The short answer is no, it’s not enough,” said Brad Iles, CEO of Brazos Midstream. “We do see that another pipeline is necessary.”

Iles participated in a Nov. 20 discussion on the Permian’s midstream plight at Hart Energy’s DUG Executive Oil Conference & Expo. Brazos Midstream owns the largest privately held platform in the Permian Basin, with G&P assets in both the Midland and Delaware basins.

Associated gas production has risen steadily in the Permian and will continue growing quickly as crude production in the basin continues to mature, the panelists said.

East Daley Analytics noted in October that the Matterhorn Express, a 2.5-Bcf/d pipeline that began operations in the fourth quarter, is filling up faster than any other natural gas pipeline in the Permian’s history. Five weeks after start-up, flows had already reached 1.5 Bcf/d.

“Our view is that both basins are going to be growing, between 1.5 Bcf/d to 2 Bcf/d of residue gas per year,” said Trevor Howard, senior vice president and CFO for Kinetik, a public midstream company focused on the Delaware Basin.

Howard said the Matterhorn should provide enough egress until the end of 2025. In 2026, Kinder Morgan’s recently announced Gulf Coast Express expansion project will add about 500 MMcf/d of capacity, and the WhiteWater-led Blackcomb Pipeline project is expected to add 2.5 Bcf/d of capacity.

“Another pipeline is going to be needed in 2027, and our view is, likely again in 2029,” Howard said.

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Several Permian gas egress projects are still in the proposal stages. Energy Transfer is pursuing the Warrior Pipeline, which would take gas to the company’s midstream network connections near the Dallas/Fort Worth Metroplex. ONEOK has received permits from the Federal Energy Regulatory Commission for the Saguaro Pipeline, which would deliver Permian gas to the Mexican border to supply an LNG project on Mexico’s west coast.

Even with new pipelines, Howard said that some of the existing Delaware natural gas infrastructure faces upgrades and adjustments as the basin matures and produces a higher ratio of sour to sweet gas.

New Mexico plays are developing in shallower parts of Delaware with higher levels of CO2 and hydrogen sulfide, along with pockets of nitrogen.

“The Delaware Basin, for the last 15 years, has been built as a sweet gas play, and you can't take a sour gas stream and put it into a sweet system,” Howard said.

Kinetik is therefore in the process of adjusting its network for more favorable sweet and sour gas mixtures. The company announced a new pipeline during its third-quarter earnings meeting that will allow it to use its Kings Landing complex, currently under construction, for sour gas processing.

Other sectors of the Permian midstream infrastructure are less stressed than the natural gas situation.

The NGL takeaway for the region is overbuilt right now, Iles said. It’s a good situation for Permian midstream companies, which have relied on NGL produced by gas processing as part of their commercial revenues at times when natural gas prices have been consistently low in the region.

“As I look back over the last five to 10 years, we’ve had some really tight times, so it’s really nice that at least that part of the business is something we don’t necessarily have to lay awake at night and worry about,” Iles said.

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