Southern California Gas Prices Hold Premium Amid Permian Demand Surge

The recent infrastructure improvements in the Permian Basin have enabled demand-driven repricing of natural gas in Southern California, causing local prices to remain significantly higher than Henry Hub.

NGI's Daily Historical Data shows that SoCal Citygate spot averaged $3.850/MMBtu on Wednesday, while Henry Hub averaged $2.555. This premium narrowed to $1.320 from Tuesday's $1.54 peak but remains above June's average 21.0-cent discount.

The trend is also observed at the SoCal Border Avg., which averaged $3.060 on Wednesday after hitting an intraweek high of $3.455. The increased demand in the region, driven by natural gas-fired power burn and Mexico exports, has firmed Permian pricing and lifted the entire Southwest corridor.

According to NGI's Entropic Analytics data, Lower 48 natural gas-fired power burn averaged about 51 Bcf/d this month, peaking at 57.1 Bcf/d on July 15, while Mexico exports approached 7.8 Bcf/d.