Permian Gas Prices Expected to Rise with New Egress Capacity

The Permian Basin in Texas has seen a dramatic increase in natural gas production since 2016, growing from 2.1 billion cubic feet per day (ft3/d) to nearly 23.0 billion ft3/d by May 2026.

This surge in production has outpaced the available takeaway capacity, leading to negative prices for natural gas at the Waha Hub, which was observed for 172 days in 2024 and is expected to be even more frequent this year.

However, relief may be on the horizon with the introduction of new egress capacity, including the Gulf Coast Express (GCX) pipeline, which added about 0.6 billion ft3/d of takeaway capacity, and two other pipelines, Hugh Brinson and Blackcomb, that will provide a total of 4.5 billion ft3/d of additional capacity.

A study using the Gas Pipeline Competition Model found that these new pipelines will reach maximum capacity quickly, with utilisation rates staying at or near 100% for several years.