Permian Natural Gas Could Remain Constrained Through 2022

Finally, there’s some good news for Permian Basin natural gas producers who have long suffered through instances of low, even negative, pricing. Initial deliveries in August to Kinder Morgan’s new Gulf Coast Express (GCX) project provided a minor bump in prices. However, producers will remain hamstrung by pipeline capacity constraints, and it will be at least three years until a number of proposed projects bring permanent relief. That’s one of the key findings of the analysis we conducted using the ProdCast natural gas, crude, and NGL production forecasting software. ProdCast, which is part of our MarketView FundamentalsⓇ (MVF) solution suite, enables users to quickly and easily perform accurate, in-depth market fundamental analysis and gain actionable intelligence. In the wake of news that recent commissioning activity on the GCX project led to an increase in gas deliveries to the pipeline, we used ProdCast to compare various growth scenarios versus progress-to-date on GCX and other projects to forecast what producers can expect for the short- and long-term. The Result: The Region Likely Faces Difficult Pricing Through 2022. First, let’s consider the two pieces of good news that Gulf Coast Express brought to producers last month. As my colleague Bert Gilbert explained in… continue reading

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Source: CTRM Center

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