Natural Gas Prices in the Permian Basin Likely to Remain Low During 2019 Due to Constrained Pipeline Capacity, says GlobalData

“A direct consequence of the excess of natural gas supply is the low prices at which Permian gas is traded at the Waha Hub in north Pecos County. During the last quarter of the current year, the average discount to Henry Hub price has average around US$1.45 per thousand cubic feet (mcf) and earlier this week the discount widened, widely reflecting the exhausted capacity of pipelines.

“Although additional pipelines have been sanctioned to transport gas to the US Gulf Coast and Mexico, production will continue to surpass total pipeline capacity up to the year 2020. Also, the volume exported to Mexico might not be at its optimal level due to pipeline delays within Mexico that are to move the product further south.

“With an assumed increase in the export to Mexico and the potential for new LNG plants in the USGC, natural gas from Permian is expected to be matched by this additional demand. However pipeline projects in Mexico are facing delays and of a total seven planned projects that should have started by Q4 2018, five are delayed…

 

Click Here For Remainder of Article 

Posted in: Opinion

About the Author:

Post a Comment