Case Studies

Revealing the Secrets of the Katy and Agua Dulce Markets

Written by East Daley Analytics | May 10, 2024 3:55:20 PM

With a large number of intrastate pipelines that have minimal, if any, official metering data associated with them, the South Texas oil and natural gas landscape’s lack of transparency makes it difficult for producers, investors, and traders alike to fully unravel the complex energy supply chain. When a key player in the natural gas and LNG market sought visibility in South Texas to optimize their operations for the next decade, they turned to East Daley for consulting support.

Opening the Black Box: The Challenges of Navigating South Texas’s Unmetered Pipelines

Our client came to us for help making a confident, data-driven decision between two South Texas natural gas markets—Katy and the Agua Dulce hub. Making the right decision would reduce their downside risk and increase their profitability over the next five to ten years.

Without visibility into the markets served by these pipelines and the intricate nature of the energy supply chain in South Texas, our client faced challenges including:

  • Difficulty predicting supply and demand
  • Revenue risk from discounted realized price
  • Losing their competitive advantage on pipeline rate charges

Building Strategic Insights Into South Texas Pipeline Dynamics

Since most pipelines at Katy are intrastate pipelines, to fully understand this market, we focused on known variables first to later solve for the unknown variables—starting with facts and measurable insights and filling in the blanks by making data-driven extrapolations. 

To build a forecast that would help our client overcome the challenges they were facing, we employed:

  • Custom-built models on hub-level supply and demand fundamentals
  • Detailed market analysis including access to pipeline rates and financial metrics
  • Focused, comparative evaluations

After looking into our historical production and demand models and taking new developments such as the in-progress Blackfin and Matterhorn pipelines into consideration, we presented our client with a comprehensive report that recommended opportunities as well as potential warning signs for unfavorable shifts in price for both pipelines.

Our report helped them confidently decide which of the two markets to focus their energy and efforts in over the coming years to ensure sustainability and growth over the next decade.

Take the Reins of the Energy Market With East Daley Consulting

When you need help untangling the complex web of oil and gas markets across North America, East Daley Analytics provides the wisdom you need to make the most of all the data at your fingertips. Our consulting services leverage integrated data modeling and system analysis to not only provide you with all the data you need but also help you make sense of it all as well so you can make the best possible decisions.

To get started, contact us today.