Flows – Kinder Morgan (KMI) managed to take two greenfield projects from open season to a final investment decision (FID) in the last quarter of 2024, and the pipeline giant isn’t slowing down.
Last month, KMI closed a binding open season for its Texas Header project on the Kinder Morgan Louisiana Pipeline (KMLP), marketing a whopping potential capacity of 5 Bcf/d. The project would require greenfield construction of a 48-inch header pipe separate from KMLP’s existing legs and include up to six connections to other long-haul pipes, including KMI’s recently FID’d Trident Intrastate Pipeline. KMI anticipates starting the Texas Header as early as 4Q27.
Trident is currently slated to enter service in 1Q27 with a capacity of 1.5 Bcf/d, most of which is bound for Golden Pass LNG. However, the original open season for the project was 2.8 Bcf/d, so if the Texas Header attracts sufficient commercial interest, KMI could expand Trident as well.
The most likely customers would be shippers trying to reach LNG facilities at the mouth of the Sabine River on the Texas-Louisiana border, namely Golden Pass LNG, Port Arthur LNG, and Sabine Pass LNG. Golden Pass is well-supplied already, and Sempra Energy (SRE) has plans for two 2 Bcf/d header pipes into Texas and Louisiana. These two pipes could provide all the supply Sempra needs for the four 1 Bcf/d trains currently under development at Port Arthur LNG. The project’s third and fourth trains are still waiting on regulatory approvals and have yet to make FID.
Cheniere’s Sabine Pass Expansion, however, would require 3 Bcf/d of feedgas with no clear supply source at the moment. Given that the existing Sabine Pass facility pulls over 2 Bcf/d from KMLP and KMI’s Natural Gas Pipeline (NGPL), East Daley speculates that the Texas Header’s most likely customer is the Sabine Pass Expansion.
Infrastructure – Waha gas prices could face a shock in the last week of February as Kinder Morgan’s (KMI) El Paso Natural Gas Pipeline (EPNG) is set to take 756 MMcf/d of capacity offline for maintenance. The work on EPNG will take place at the North Mainline compressor station from February 24-27.
Major pipeline maintenance events historically have contributed to brief but sharp price declines at the Waha hub, driven by limited egress capacity from the Permian Basin. However, Matterhorn Express is now in service and has expanded Permian takeaway, so maintenance events like these should have less impact on prices going forward.
Infrastructure – Regulators have reinstated a certificate for the Regional Energy Access (REA) project on the Transcontinental (Transco) pipeline owned by Williams (WMB).
WMB announced that the Federal Energy Regulatory Commission (FERC) issued a remand order on January 24 to reinstate the certificate for REA. The project adds capacity along the Leidy Line connecting the Leidy storage hub in Pennsylvania to the northern end of the Transco system.
The certificate for the REA project had been revoked after an appellate court ruled against FERC in a case brought by the New Jersey Conservation Foundation. The court found that approval of the expansion was not in line with state laws mandating reductions in natural gas consumption, and that FERC overlooked a lack of market need for the project.
Following the court challenge, Transco filed with FERC for an emergency certificate to keep the expanded facilities in service. The order of remand replaces the emergency certificate and gives Transco the right to operate under the original certificate.
East Daley has monitored volumes associated with the REA expansion through these proceedings. WMB started REA Phase 1 in October ‘23, and pipeline samples show flows through Transco's Leidy Line jumped immediately to fill the new capacity. The new capacity continues to be highly used through the heating season. Prior to the expansion, flows through Leidy Line Station 515 averaged 2,134 MMcf/d in Jan ’23. Following the expansion, average January flows increased to 2,624 MMcf/d in 2024 and 2,656 MMcf/d in 2025 (see top figure).
A similar increase has occurred at Station 207 on Transco, where gas enters the Lower New York Bay Lateral that runs between New Jersey and New York. The flows through this point averaged just 81 MMcf/d in January ‘23 but increased to 144 MMcf/d in Jan ‘24 and 186 MMcf/d last month (see figure).
The immediate utilization of the REA facilities shows the value of new capacity in the Northeast demand corridor. The expansion has helped in periods of peak heating demand, as we saw during the extreme winter weather in January 2025.
Flows – US flow samples rebounded 3.1 Bcf/d (+4.7%) during the February 2 week, averaging 69.98 Bcf/d.
Samples rose W-o-W in nearly every basin, including a 5.5% gain in the Northeast, a 7.1% increase in the Permian and an 8.3% W-o-W gain in the Anadarko Basin. Samples for the week were the highest since December ’24.
The big gains followed a period of lower delivery earlier in January caused by a powerful winter storm. A polar vortex brought frigid temperatures to most of the Lower 48 over January 20-26, reducing flows in many basins as wells froze over. But flows recovered as temperatures warmed in late January. A surge in cash prices during the extreme weather also may have prompted some producers to restart shut-in wells.
Storage – Cold weather in January has wiped out the storage surplus to the 5-year average and pushed gas prices higher in 2025. The latest EIA weekly survey creates deficit conditions as predicted in East Daley’s Macro Supply & Demand Report, the first time in 2+ years that storage has trailed the 5-year average.
The EIA last Thursday reported a massive -321 Bcf storage withdrawal for the week ending January 24. The survey captured soaring heating demand as a polar vortex plunged through the Lower 48. The latest EIA survey leaves inventories at 2,571 Bcf, 111 Bcf below the 5-year average.
The figure comes from East Daley’s January Macro Supply & Demand Report, which anticipated the turn to a deficit in the Jan. 24 weekly EIA survey. We predict January Res/Com demand will average 50.2 Bcf/d, the second-highest level ever behind January ‘14. Total Res/Com demand for the winter season will average 39.6 Bcf/d, or 2.6 Bcf/d greater than last winter.
We anticipate spending all of 2025 in deficit conditions as demand grows from new LNG projects and producers play catch up. As we inch closer to a more balanced market in 2026, we see marginal surpluses arising in May ‘26 that could last for the balance of the year.
The significant cold in January has pushed futures prices up along the curve. East Daley sees this as a necessary adjustment, as we’ve forecasted prices near $4/MMBtu since early 2024 in the Macro Supply & Demand Report (our January ‘24 forecast predicted Cal ‘25 would average $3.90).
Rigs – The US rig count decreased by 2 for the January 25 week, standing at 528. The Anadarko (+3) and Eagle Ford (+1) added rigs while the Marcellus + Utica (-3), Permian (-2), and DJ (-1) lost rigs on the week.
On the midstream side, Targa Resources (TRGP) is up 3 rigs net with additions on its Permian and Anadarko systems. Energy Transfer (ET) lost 4 rigs total on its Delaware, Midland and Bakken systems.
East Daley’s weekly Midstream Activity Tracker monitors rig activity by basin and by gathering and processing (G&P) system to better understand midstream impacts. We allocate rigs and monitor flows through 150+ public and privately owned G&P systems in every North American basin. Reach out for more information on the Midstream Activity Tracker.
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