Monthly Production Stream: October

Data centers are adding significant, non-intermittent demand for natural gas. What could that mean for Permian production and infrastructure?

• Natural gas: Permian demand is growing from Gulf Coast pipeline expansions and gas-fired power generation supporting data centers. The basin could very quickly become short gas – a strange paradox for a basin that has been notoriously constrained in the past
• Crude: As gas demand and egress capacity grow, producers could shift toward gasier windows in the Delaware and Midland basins, producing more associated gas alongside lower oil volumes. We’ll consider how that could ease crude egress pressure and how much new oil pipeline capacity might be needed beyond the potnetial brownfield expansions we discussed last month.

• NGLs: Higher Waha prices could encourage more ethane rejection, while new very large ethane carriers (VLECs) are expected to be built over the next several years. We’ll explore the tug-of-war between rejection at the wellhead and growing demand at the dock—and what it could mean for ethane production.