Infrastructure – Southbound flows on Natural Gas Pipe Line of America (NGPL) from Carthage into Houston Ship Channel have fallen from an average of 1.2 Bcf/d in September to just 200 MMcf/d on October 22. East Daley attributes this decline to displacement from new inbound Permian Basin supply on Matterhorn Express Pipeline.
Matterhorn began delivering natural gas on October 1 from the Permian to pipelines near Katy on the Texas Gulf Coast. NGPL has a 737 MMcf/d interconnect with Matterhorn in Wharton County, TX. The meter has averaged 600 MMcf/d of receipts since October 16, the same day when southbound flows on NGPL fell by nearly 500 MMcf/d.
We have seen declines previously in NGPL southbound flows when Freeport LNG has been out of service, reducing demand in the Houston market by up to 2 Bcf/d. Now we see a new dynamic where oversupply, rather than reduced demand, is causing displacement of Haynesville supply.
To stay in the loop on all infrastructure dynamics along the Gulf Coast, reach out to East Daley for more information on our regional S&D reports.
Infrastructure – Kinder Morgan (KMI) has launched a binding open season for Trident Intrastate Pipeline, a new project designed to deliver up to 2.8 Bcf/d from the Katy hub to the Port Arthur area on the Louisiana border. With Golden Pass LNG on board as a shipper, Trident could alleviate oversupply risk as more Permian gas is pushed to the Texas coast.
KMI started the open season on October 14 seeking binding commitments for the Trident project. The company is targeting in-service by February ’27. Trident should help move gas from a saturated South Texas market as the Matterhorn and Blackcomb pipelines bring in up to 5.0 Bcf/d of incremental Permian supply by 2027.
East Daley monitors the Texas Gulf Coast market in the Houston Ship Channel Supply & Demand Report. Pipelines in the Port Arthur area have capacity to move ~7.8 Bcf/d and can pull in as much as 8.8 Bcf/d during the winter months, when LNG production peaks. We forecast up to 4.7 Bcf/d of FID’d incremental LNG demand through YE27 at Golden Pass LNG and Port Arthur LNG.
On October 15, Golden Pass LNG (2.7 Bcf/d) announced that the project had signed up for capacity on Trident. Golden Pass LNG currently has commitments for 1.1 Bcf/d of firm transport out of the Haynesville on Energy Transfer’s (ET) Gulf Run Transmission and for 340 MMcf/d on Natural Gas Pipeline of America (NGPL). East Daley estimates that Golden Pass needs ~1.16 Bcf/d of additional firm transport to fully supply the facility’s liquefaction project, an unknown share of which will come from Trident.
Previously, East Daley had called for new capacity between Houston Ship Channel and Louisiana on Blackfin Pipeline, for eventual delivery to Venture Global’s CP Express and CP2 LNG. However, it appears that KMI has beaten WhiteWater Midstream to the punch, particularly since CP2 is delayed by the Department of Energy’s pause on non-FTA licenses
Flows –Flows through El Paso Natural Gas’ (EPNG) Plains station came to a halt on Tuesday (October 22) as maintenance reduced flows to zero. The station has been undergoing repair work since the beginning of October, but the start of Department of Transportation (DOT) testing on Tuesday has effectively taken the station out of service.
The testing work is scheduled to end on October 25, lifting some of the constraints through the station. However, repair work is still scheduled through October 31, and max capacity will remain reduced by ~200 MMcf/d until the repairs are completed.
The Plains station serves as a major egress point for Permian flows, and the outage drove Waha prices back into negative territory earlier this month despite the ramp up of the Matterhorn Express pipeline alleviating some constraints.
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
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 surveyed by East Daley were flat at ~68.5 Bcf/d for the October 20 week.
Bakken samples rebounded by 6% (+129 MMcf/d), averaging 2.44 Bcf/d for the week as operators restarted some production following wildfires in western North Dakota. Fires in the Ray-Tioga, Elkhorn, and Bear Den areas caused several operators to halt production earlier in October. Bakken samples are still ~95 MMcf/d below gas receipts at the end of September.
Permian pipeline samples decreased by an average of 6.7%, due in part to maintenance on El Paso Natural Gas (EPNG) pipeline. The work at the Plains station, a key exit point for Permian gas flows, has put pressure on Waha prices, driving prices into negative territory earlier in the month.
Storage – Traders and analysts expect the Energy Information Administration (EIA) to report a 62 Bcf storage injection for the week ending October 18, according to a survey by The Desk. The range of estimates is for a net injection from 43 to 75 Bcf.
A 62 Bcf injection in the Thursday report would shrink the surplus to the 5-year average by 14 Bcf to 149 Bcf. The surplus to last year would fall by 19 Bcf to 88 Bcf. Working gas inventory totals 3,705 Bcf following the 76 Bcf injection reported in the October 10 survey.
Henry Hub futures for November ‘24 remain under pressure, trading near $2.30/MMBtu early this week. Record warmth across the Midwest and Northeast has delayed the start of early heating demand in key consuming regions. 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 –The US rig count decreased by 2 for the October 12 week, standing at 567 rigs. Basins losing rigs W-o-W include the Permian (-2), Barnett (-1) and Uinta (-1). The Bakken (+1) and Marcellus+Utica (+1) added rigs for the week.
On the midstream side, Phillips 66 (PSX) gained 3 rigs on its DJ, Eagle Ford and Delaware systems. Kinder Morgan (KMI) is down 2 rigs with losses on its Permian 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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