Matterhorn Express Pipeline has started flowing gas into pipelines near Katy, marking start-up of the much-anticipated Permian project. Waha prices jumped this week as the new takeaway opened, though Permian gas prices remain low. East Daley Analytics expects supply growth across Permian commodities in 4Q24 thanks to the Matterhorn start.
Matterhorn began moving gas Tuesday (October 1) on new interconnects with Williams’ (WMB) Transcontinental Gas Pipe Line (Transco) and Enbridge’s (ENB) Texas Eastern Transmission (TETCO) systems in southeastern Texas. Matterhorn delivered 180 MMcf/d at Transco’s Clarks Branch receipt point in Wharton County, and 137 MMcf/d at TETCO’s Hillboldt Road interconnect in Austin County, according to the pipelines’ electronic bulletin boards. Natural Gas Pipeline of America (NGPL) also has added a Matterhorn receipt point near Katy but is not yet flowing gas.
Led by WhiteWater Midstream, the new 42-inch pipeline runs ~580 miles from the Waha hub in West Texas to Katy outside Houston. Waha prices jumped 34c on Tuesday to $0.45/MMBtu, and increased to $0.62 Wednesday on the bullish news. Permian gas prices have frequently traded negative since August as egress pipes filled and Kinder Morgan (KMI) conducted extended maintenance work on the El Paso system.
EDA expects oil and gas supply growth to pick up in the Permian following the start of Matterhorn. Permian gas production is on pace to grow 1.6 Bcf/d in 2024 (exit-to-exit), and oil production grows 150 Mb/d to 6.25 MMb/d by YE24, according to our latest supply forecasts in Energy Data Studio (see figure). NGL production also grows, though we see some tradeoffs for ethane. Leading Permian producers such as Chevron (CVX), ExxonMobil (XOM), Matador Resources (MTDR) and Vital Energy (VTLE) also have guided to production growth into 4Q24, supporting our outlook. – Ian Heming Tickers: ENB, KMI, WMB.
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