Infrastructure – Kinder Morgan’s Natural Gas Pipe Line of America (NGPL) system has started receiving gas volumes from the new Matterhorn Express Pipeline. Flows started for the first time Tuesday (October 15) at a new interconnect.
Matterhorn began delivering natural gas on October 1 from the Permian Basin to pipelines near Katy on the Texas Gulf Coast. After initially listing its Matterhorn interconnect point on October 1, NGPL posted zero flows for two days, then removed the interconnect from its electronic bulletin board (EBB). The Matterhorn interconnect remained unlisted until Tuesday, when NGPL posted initial flows of 165 MMcf/d, about 25% of the interconnect’s 665 MMcf/d capacity.
NGPL joins Transcontinental (Transco) and Texas Eastern (Tetco) among interstate systems receiving gas from Matterhorn. Total flows to interstate pipes have surpassed 820 MMcf/d with the new NGPL volumes, breaking 700 MMcf/d for the first time. Both the Tetco and Transco Matterhorn interconnects have been flowing at over 90% of their respective capacities since October 9, with Transco hitting 100% of capacity four times over that span, according to flow data from IIR Energy.
Available capacity from Matterhorn to interstate interconnects near Katy has jumped from 692 MMcf/d to 1,357 MMcf/d with the addition of NGPL, accounting for 54% of Matterhorn’s 2.5 Bcf/d capacity.
Flows – Matterhorn isn’t the only pipeline ramping deliveries on the Gulf Coast. Energy Transfer’s (ET) Gulf Run Pipeline in Louisiana has seen significant growth in southbound deliveries since the summer, including flows to Golden Pass Pipeline (GPPL). The ramp could be the first of larger expansions ahead as Golden Pass LNG grows exports.
The Gulf Run system forms a large ‘T’ across Louisiana (see map). Zone 1 connects Haynesville supply to Perryville markets and has bidirectional capability, but Zone 2 will be the real money-maker. The Zone 2 line entered service in January ‘23 and provides ~1.65 Bcf/d of egress from the Haynesville with direct interconnects to LNG demand in southern Louisiana, including GPPL and ET’s Trunkline system.
In April ‘24, regulators approved a new section of the Golden Pass line for service, and since June, over 300 MMcf/d of additional Haynesville volumes have been delivered to GPPL from Gulf Run (see figure), even though the Golden Pass LNG expansion is still more than a year out from first LNG production.
ET has guided to an additional 3 Bcf/d of potential expansions on the Zone 2 pipe, which will be necessary to fill the 2.6 Bcf/d Golden Pass line. Golden Pass LNG already has 1.1 Bcf/d of capacity contracted on Gulf Run through the summer of 2043.
For now, GPPL is being used to wheel gas around the Port Arthur, TX area. The Golden Pass Pipeline interconnects with many interstate and intrastate systems plus the Golden Triangle storage field, providing great optionality value.
East Daley Analytics tracks Golden Pass LNG in the Southeast Gulf Supply & Demand Report and Houston Ship Channel Supply & Demand Report. We have observed the Golden Pass line dropping off the ~300 MMcf/d of Gulf Run receipts onto Texas Eastern (TETCO) and Kinder Morgan Tejas. The Tejas volumes (~70 MMcf/d) are flowing southwest into Katy, while the TETCO volumes (~190 MMcf/d) flow east. The remaining ~50 MMcf/d of supply from Gulf Run is filling Golden Triangle Storage. GPPL also interconnects with Florida Gas Transmission (FGT), Natural Gas Pipe Line (NGPL), KM Texas, and HPL Texoma in Texas, and the Transcontinental and Tennessee Gas lines in Louisiana.
While the simplest method for supplying Golden Pass would be via expansions on Gulf Run, East Daley is also considering scenarios where the incremental LNG demand is met via supply from East Texas on the various intrastates (KM Tejas & Texas, and HPL) out of Carthage. Currently those volumes flow further south into the Houston market. However, as Matterhorn and Blackcomb (2.5 Bcf/d each) ramp in early 2025 and 2026, GPPL and Golden Pass LNG could provide an outlet for intrastate volumes that would otherwise contribute to an oversupplied Katy market.
If either LEG or NG3 are delayed past 2H25, expect to see NGPL-TXOK prices weaken significantly until new capacity opens up. See our Southeast Gulf Supply & Demand Report for basis forecasts and more information.
Flows – Pipeline samples rose W-o-W to ~68.5 Bcf/d for the October 13 week. Wildfires in North Dakota's Bakken region impacted oil and gas production, down 5% (123 MMcf/d W-o-W. Fires in the Ray-Tioga, Elkhorn, and Bear Den areas caused several operators to halt production temporarily to protect infrastructure. East Daley expects the fires will lead to only short-term production shut-ins and that the overall outlook for the Bakken remains positive into 2025.
Hurricane Milton caused significant disruptions to oil and gas production when it passed through the Gulf of Mexico. Chevron evacuated its Blind Faith platform, which produces 65 Mb/d, and shut down operations in preparation for the storm. Based on Bureau of Safety and Environmental Enforcement data, nearly 49% of offshore gas production was shut-in as operators evacuated staff and implemented safety protocols during the last two hurricanes. For the week of October 6, GOM pipe samples fell ~400 MMcf/d, reflecting the reduced operations, but samples showed signs of returning back to normal, up 3% in the latest week.
Storage – Traders and analysts expect the Energy Information Administration (EIA) to report a 78 Bcf storage injection for the week ending October 11, according to a survey by The Desk. The range of estimates is for a net injection from 63 to 85 Bcf.
Working gas inventory totals 3,629 Bcf as of the latest EIA survey. A 78 Bcf injection would shrink the surplus to the 5-year average by 11 Bcf to 165 Bcf. The surplus to last year would fall by 13 Bcf to 111 Bcf. Working gas inventory totals 3,629 Bcf for the week ending October 4.
Henry Hub futures for November ‘24 have been on a two-week losing streak, trading near $2.37/MMBtu recently. Prices have been pressured by forecasts for above-normal temperatures into late October across most US regions, eating into early heating season demand. In the latest Macro Supply & Demand Forecast, East Daley expects total US working gas inventory to peak at 3,897 Bcf at the end of October, or 185 Bcf above the five-year average. Our forecast would mark the highest storage inventory since October 2020, when the Henry Hub spot price averaged $2.39/MMBtu.
Rigs – Rig data was delayed for the first week of October. The US rig count decreased by 1 for the September 28 week, standing at 566. Basins losing rigs include the ArkLaTex (-2), Anadarko (-1) and Powder River (-1). The Marcellus+Utica added 2 rigs on the week.
On the midstream side, Targa Resources (TRGP) was down 3 rigs on its Delaware and Midland systems at the end of September. Kinetik (KNTK) gained 2 rigs on its Durango system in the Delaware Basin.  
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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