The Texas Matterhorn Pipeline is starting to pump gas out of the Permian

The Matterhorn Natural Gas Pipeline in Texas has begun moving small amounts of gas from the Permian Basin in West Texas to the Gulf Coast, US oil and gas company energy executives announced. Permian Resources (NYSE:PR) they revealed. Currently under construction, the Matterhorn will move large amounts of gas that has been trapped in the Permian Basin, driving up prices at the Waha Hub in West Texas. to become negative. According to Permian Resources executives, Waha gas prices should price more consistently in positive territory as more gas flows through the giant pipeline.

“Spot Waha has not been a fun place to sell gas in recent months. We would like to sell gas at more than zeroPermian Resources said. The 490-mile (789 km) pipeline will be capable of moving up to 2.5 billion cubic feet per day (bcfd) of gas from the Permian to the Gulf Coast and could come online in third quarter 2024.

According to Maria Paz Urdaneta, a commodities analyst at East Daley Analytics, the Matterhorn Express startup will redirect Permian natural gas to South Texas and, for a short time, shift market influence from pipelines to shippers. Matterhorn will also reduce pressure on Permian gas prices caused by the package lock. Permian pipelines have been full since spring, causing spot prices to turn negative several times in the basin so far this year. In other words, Waha traded $1.23/MMBtu negative this week, likely due to ongoing maintenance on Kinder Morgan(NYSE:lKMI)’s El Paso System.

The analyst also pointed out that early flows will primarily be shifted from pipelines north to the Midcontinent, including Kinder Morgan’s Natural Gas Pipeline of the Americas and Berkshire Hathaway’s Northern Natural Gas Pipeline. However, the relief could be short-lived: Urdaneta predicted that Permian Basin producers will likely increase output once the Matterhorn comes on stream, triggering more constraints that have sent natural gas prices into negative territory through the second half of the year 2026.

By Alex Kimani for Oilprice.com

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