A Whitewater-backed investor group has reached a final investment decision (FID) on Blackcomb Pipeline, a new 42-inch gas line out of the Permian Basin. The blockbuster project is expected to come online in 2H26 and could wrap up the competition for new expansions to follow the Matterhorn pipeline, according to East Daley’s Permian Supply & Demand Forecast.
Whitewater announced the Blackcomb partnership and project FID last Wednesday (July 31) between the Whistler Pipeline JV (50.6% Whitewater Midstream, 30.4% MPLX, and 19% Enbridge (ENB)) and Targa Resources (TRGP). The Whistler partners own 70.0% of the Blackcomb project, TRGP has a 17.5% stake, and MPLX will hold a 12.5% interest in addition to its stake via the Whistler JV.
Blackcomb is designed to transport up to 2.5 Bcf/d of gas over ~365 miles from the Permian to the Agua Dulce hub in South Texas. The pipeline will source gas from processing plants in the Midland and connections to the Agua Blanca Pipeline in the Delaware Basin.
Along with Targa, Blackcomb is backed by firm transportation agreements with investment-grade producers including Devon Energy (DVN), Diamondback Energy (FANG) and Marathon Petroleum (MPC). The Blackcomb route appears to follow a similar right-of-way as Whistler Pipeline; Whitewater has expertise in this route, which raises our confidence in the proposed in-service date.
Blackcomb is the fifth proposed pipeline project out of the Permian, but the first to reach FID after Matterhorn Express Pipeline. Other proposals include Energy Transfer’s (ET) Warrior, TRGP’s Apex, and Moss Lake’s DeLa Express Pipeline. Kinder Morgan (KMI) is also seeking customers for a compression expansion of Gulf Coast Express (GCX). Targa’s participation in Blackcomb likely snuffs out hope for the Apex project.
In the Permian Supply & Demand Forecast, East Daley anticipates Blackcomb will not arrive in time to avoid the earliest of gas egress constraints that begin to show up in winter 2025. We expect Blackcomb will have initial capacity of 2 Bcf/d, with the opportunity to add 500 MMcf/d of compression later. Whitewater also operates Whistler Pipeline and has managed that system’s capacity in the same incremental manner.
Blackcomb would follow the 2.5 Bcf/d Matterhorn Express Pipeline, now targeted online in 4Q24, to meet near-term production growth from the Permian. While the Permian is chronically constrained, our basin model shows latent gas egress capacity as production struggles to fill Blackcomb ahead of start-up of Saguaro Connector in 2029 (2 Bcf/d). Producers would need to step up drilling more than we assume, and crude pipelines would need to be expanded to raise the ceiling for oil-driven growth, in order to fill Blackcomb and later Saguaro in our Permian model. – Alex Gafford Tickers: DVN, ENB, ET, FNG, KMI, MPC, TRGP.
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