Any day now Matterhorn Express, a giant gas pipeline led by Whitewater Midstream, is due to start from the Permian Basin. Following Matterhorn, the market has line of sight on a second Whitewater project, Blackcomb Pipeline. The new pipes will help resolve takeaway issues from the Permian but are likely to create a different set of problems moving natural gas downstream, according to East Daley Analytics’ latest regional models covering the Permian and Texas Gulf Coast.
On July 31, Whitewater announced Blackcomb and a final investment decision (FID) between the Whistler Pipeline JV (Whitewater, MPLX and Enbridge (ENB)) and Targa Resources (TRGP). East Daley includes Blackcomb in our updated supply and demand forecasts for the Permian Basin and Houston Ship Channel, released last week. We model linefill on Blackcomb starting in July 2026 and ramping to a full 2.5 Bcf/d by December ’26 to the Agua Dulce hub.
The Permian Basin is a reliable source of supply for South Texas, a role bolstered by recent compression expansions (Permian Highway Pipeline, Whistler) and the new 42-inch Matterhorn and Blackcomb projects. In the Permian Basin Supply & Demand Forecast, EDA expects pipeline utilization on these eastbound routes to remain high as Permian supply continues to grow (see figure).
Rapid Permian growth has saturated the South Texas market in recent years, leading to wide basis differentials between Houston Ship Channel and the Carthage market in East Texas. Pipeline capacity from the Permian to South Texas increases to 11.4 Bcf/d in 2025 after start-up of Matterhorn Pipeline, and to 14 Bcf/d in 2027 once Blackcomb comes online, up from just 3.4 Bcf/d in early 2019.
We expect limited demand growth in 2024, so additional inbound flows from the Permian will need to displace inbound supply from the Carthage market in East Texas. In the Houston Ship Channel Supply & Demand Forecast, we reduce flows from Carthage to Houston by 1-2 Bcf/d from 2024-28 to balance the South Texas market, indicating Houston will trade at a discount to Henry Hub. Carthage will provide swing supply in 2029-30 as LNG demand in South Texas comes online and additional pipeline capacity from Texas to Louisiana is available to support LNG projects on the TX/LA border.
Check out our new Permian Basin and Houston Ship Channel regional models for more information. – Oren Pilant Tickers: ENB, TRGP.
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