Kinder Morgan Inc. has begun internal discussions about building a third natural gas pipeline in the Permian Basin as demand for gas takeaway capacity continues to surge, CEO Steven Kean told investors on April 17.
As natural gas production has outpaced pipeline capacity in the Permian Basin, a gas glut has led to plummeting prices in the region, with spot prices at the Waha hub even trading at negative levels.
Kinder Morgan believes demand for gas takeaway capacity could grow by 2 billion cubic feet per day each year over the next few years, equivalent to the Houston pipeline operator's Gulf Coast Express project, Kean said.
"Demand to get gas out of the Permian continues to grow and the desire to unlock value that's in oil and (natural gas liquids) continues to put pressure on need for additional takeaway capacity," Kean said. "There is interest in pipe three."
Kinder Morgan's Gulf Coast Express natural gas pipeline in the Permian Basin is set to come into service in October. Another similar project, the Permian Highway, is on schedule to begin service one year later.
Recommended Reading
Sinopec Brings West Sichuan Gas Field Onstream
2024-03-14 - The 100 Bcm sour gas onshore field, West Sichuan Gas Field, is expected to produce 2 Bcm per year.
E&P Highlights: March 11, 2024
2024-03-11 - Here’s a roundup of the latest E&P headlines, including a new bid round offshore Bangladesh and new contract awards.
US Drillers Cut Oil, Gas Rigs for Second Time in Three Weeks
2024-02-16 - Baker Hughes said U.S. oil rigs fell two to 497 this week, while gas rigs were unchanged at 121.
CNOOC Makes 100 MMton Oilfield Discovery in Bohai Sea
2024-03-18 - CNOOC said the Qinhuangdao 27-3 oilfield has been tested to produce approximately 742 bbl/d of oil from a single well.
CNOOC Finds Light Crude at Kaiping South Field
2024-03-07 - The deepwater Kaiping South Field in the South China Sea holds at least 100 MMtons of oil equivalent.