Permian Basin's Egress Issue Resolved, But Processing Bottleneck Looms
The Permian Basin's egress issue may be resolved by 2028-2029 thanks to four major long-haul pipelines under construction, which will carry a combined capacity of 10.7 Bcf/d. However, this might not be enough to prevent pipeline blending capacity issues and negative Waha pricing.
The Permian is expected to see 4.55 Bcf/d of new processing capacity by 2029, but there may be a bottleneck due to a mismatch between natural gas liquids (NGL) processing and associated gas treating capacity.
Natural gas cryogenic facilities prioritize profitable NGL recovery, while contaminant treating relies on separate infrastructure. Venture Global's Calcasieu Pass 2 LNG facility is installing one of the largest nitrogen-removal units in the country.
Extended lead times for critical components are creating a physical bottleneck that complicates quality-specific infrastructure investments. Targa Resources plans to build three more processing plants in the Permian by 1H2028, which may mitigate the risk of a pronounced market-wide bottleneck.