Midstream Sector Surges as Permian Gas Growth Accelerates
The midstream sector is experiencing a surge in growth due to increased demand for natural gas infrastructure. The Permian Basin, the nation's largest oil-producing area and second-largest natural gas-producing region, is driving this growth. With each barrel of crude oil produced coming with 1.3 barrels equivalent of natural gas and NGLs, midstream operators are expanding processing and takeaway capacity to keep pace with rising volumes.
New pipelines are alleviating Permian constraints, providing critical egress for continued basin production growth. The Gulf Coast Express Expansion, which started up in June, has helped switch the West Texas (Waha) natural gas price benchmark into positive territory. Additional takeaway capacity is imminent, with projects like Energy Transfer's Hugh Brinson pipeline and Blackcomb pipeline expected to enter service by 2030.
Midstream operators are also sanctioning new processing plants and gathering systems to accommodate rising producer volumes. Targa Resources announced three new natural gas processing plants in the Delaware Basin, while Enterprise Products Partners (EPD) is building a new 300-MMcf/d gas processing plant in the Midland Basin and a new 150 thousand barrel per day NGL fractionator at Mont Belvieu.