Executive Summary:
Infrastructure: An expansion of the Matterhorn pipeline appears to have started operations in early November, based on interstate pipeline flow samples monitored by East Daley.
Rigs: The US rig count increased by 1 for the week of Nov. 29 to 520.
Flows: US natural gas volumes in pipeline samples averaged 69.9 Bcf/d for the week ending Dec.. 7, down 1.1% W-o-W.
Storage: The EIA reported a 177 Bcf withdrawal for the week ending Dec. 5.
Infrastructure:
A widely anticipated expansion of Matterhorn Express Pipeline appears to have started operations in early November, based on interstate pipeline flow samples monitored by East Daley.
After consistently delivering about 1.65 Bcf/d since June to the Katy market, Matterhorn flows jumped to as high as 1.95 Bcf/d in November. Pipeline operator WhiteWater was expected to add a 0.5 Bcf/d compression expansion to Matterhorn, and the sustained increase in interstate deliveries suggest that expansion is now underway or completed.
Matterhorn was originally constructed with 2.0 Bcf/d of capacity. The WhiteWater joint venture had expected to bring the additional compression online sometime after the pipeline’s initial ramp, but the timing of that expansion was pushed to 4Q25. The project is critical to opening more egress for Permian Basin gas production and providing some relief for low Waha hub prices.
Deliveries to interstate interconnects and the Tres Palacios storage hub have seen an uptick through November, holding above 1.8 Bcf/d since Nov. 7 (see figure). The flow sample also declined early in the month and at the end of October, suggesting maintenance work to bring the new compression online.
In August, East Daley reported that 549D data from the Federal Energy Regulatory Commission (FERC) showed Matterhorn was fully subscribed in 1Q25, with 2.0 Bcf/d of contracts across 13 different shippers. Those contracts were unchanged in the latest 2Q25 data. Matterhorn connects with both inter- and intrastate pipelines, meaning that only some of the pipeline’s flows are visible. With 1.65 Bcf/d of flows going to interstate pipes, this left an implied ~350 MMcf/d of deliveries to Texas intrastate lines, or about 18% of the 2.0 Bcf/d capacity.
If the pipeline maintains a similar flow ratio between interstate and intrastate systems, then interstate deliveries could reach as high as 2.05 Bcf/d when the expansion is completed. However, there is no guarantee that contracted volumes interconnects for the expansion will reach the full 2.5 Bcf/d or are more heavily weighted toward intrastate interconnects.
In either case, the Matterhorn expansion will be welcomed by Permian producers. Gas pipelines out of the basin are running effectively full, and no new capacity will be made available until mid-2026, when Kinder Morgan (KMI) expects to start a 570 MMcf/d compression expansion of Gulf Coast Express Pipeline.
East Daley is updating our monthly Permian Supply & Demand model to account for these recent developments and will project Matterhorn flows at 2.5 Bcf/d beginning in November.
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Rigs:
The US rig count increased by 1 for the week of Nov. 29 to 520 rigs. The Eagle Ford (-3), Anadarko (-1) and Powder River (-1) basins lost rigs while the ArkLaTex (+1), DJ (+1), Marcellus+Utica (+1) and Permian (+1) gained rigs W-o-W.
At the company level, Energy Transfer (-4), Phillips 66 (-3), Kinder Morgan (-3), EnLink (-2), Western Midstream (-2), ExxonMobil (-1) and Summit MC (-1) lost rigs while TRGP (+3), EPD (+2), MPLX (+1), OKE (+1), WMB (+1), M6 Midstream (+1), XTO Energy (+1), Hess Corp (+1), DTM (+1), TGE (+1) and Fasken Oil & Ranch (+1) gained rigs W-o-W.
See East Daley Analytics’ weekly Rig Activity Tracker for more information on rigs by basin and company.
Flows:
US natural gas volumes in pipeline samples averaged 69.9 Bcf/d for the week ending Dec.. 7, down 1.1% W-o-W.
Major gas basin declined 1.2% W-o-W to average 42.9 Bcf/d. The Haynesville sample declined 0.9% to 9.6 Bcf/d, while the Marcellus+Utica sample slid 1.9% to 32.3 Bcf/d.
Samples in liquids-focused basins decreased 1.0% to 19.0 Bcf/d. The Permian sample declined 2.4% to 6.4 Bcf/d, while the Eagle Ford sample gained 4.5% W-o-W.
Storage:
The Energy Information Administration (EIA) reported a 177 Bcf storage withdrawal for the week ending Dec. 5, beating most market estimates. In a survey by The Desk, analysts on average predicted a 174 Bcf withdrawal in Thursday’s EIA report.
The large storage pull, the result of a polar vortex spreading through the eastern US, considerably tightened the US storage balance. The EIA report was double the five-year average draw of 89 Bcf for the same week in early December. Working gas inventories total 3,746 Bcf after the latest EIA survey, 103 Bcf above the five-year average and 28 Bcf below a year ago.
The cold weather pattern should lead to another triple-digit draw in the next storage survey as snow and frigid temperatures blanket the Northeast this week. However, forecasts show a significant warming trend through the second half of December. The latest 10- to 14-day forecast from the National Weather Service calls for much above-normal temperatures over the southern two-thirds of the Lower 48 from Dec. 18-24.
The January ’26 prompt-month Henry Hub contract traded $0.37 lower (-8.25%) on Thursday (Dec. 11) to around $4.21/MMBtu as the weather outlook turns bearish. The rest of the 2025-26 winter strip is trading below $4, giving back some of the recent market gains. In the latest Macro Supply & Demand Report, East Daley Analytics predicts working gas will exit December at 3,386 Bcf.
See East Daley Analytics’ latest Macro Supply & Demand Report for more analysis on the winter market outlook.
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