Permian midstreamers hail pipeline expansions

A cleaner way to read this story is to start with the bottleneck. The Permian produces a lot of “associated gas” — natural gas that comes up alongside oil. When oil drilling is strong but pipelines are full, that gas can get stranded locally and prices at Waha, the Permian pricing hub in West Texas, collapse relative to Henry Hub. The U.S. Energy Information Administration said in September 2024 that takeaway constraints had pushed Waha below zero on 46% of trading days in 2024, and that new pipeline capacity should narrow the discount as constraints ease. (eia.gov) What changed this summer is that new capacity finally started to show up in the field. East Daley Analytics said on August 4 that Waha spot prices had climbed to about $1.80 per MMBtu late last week, about $4 higher than at the start of June, after startup of Kinder Morgan’s 570 MMcf/d Gulf Coast Express compression expansion and the partial start of Energy Transfer’s Hugh Brinson line. East Daley said the improvement had “materially improved” Waha prices and drilling economics. (eastdaley.com) That is why midstream executives sound more upbeat now than they did earlier in 2026. Natural Gas Intelligence reported on August 5 that management teams at leading Permian gas midstream companies were striking a bullish tone as egress capacity expanded, Waha prices improved and producers ramped activity. NGI tied that shift to stronger gas demand from LNG exports and data centers, alongside the pipeline additions. (naturalgasintel.com) The pipeline map matters here. Matterhorn Express, with 2.5 Bcf/d of capacity, was identified by EIA as a major new outlet from the Permian to Katy near Houston. EIA also listed Blackcomb at 2.5 Bcf/d, Targa’s Apex at 2.0 Bcf/d and Saguaro Connector at 2.8 Bcf/d as part of the next wave of Permian takeaway projects. (eia.gov) Some of those projects are now moving from plan to operation. Energy Transfer said on August 4 that Hugh Brinson is already in commercial service and should be able to flow its full Phase I capacity of 1.5 Bcf/d by September 1, 2026. The company said it also completed another 14-mile lateral off Hugh Brinson in Abilene, Texas, during the second quarter. (ir.energytransfer.com) Others are still coming. Oil & Gas Journal reported in June that Blackcomb and Hugh Brinson together were expected to add more than 5.25 Bcf/d of capacity by late 2026, with Hugh Brinson’s first phase delivering gas from Waha to Maypearl, south of Dallas-Fort Worth. (ogj.com) The demand side is just as important as the pipe side. Energy Transfer said this week that rising demand for gas infrastructure is being driven by power generation and LNG exports, and added that two customers recently increased existing contracts by a combined 100 MMcf/d for power plant or data-center sites in Texas. NGI also pointed to LNG exports and data centers as key supports for stronger Permian gas demand. (ir.energytransfer.com) So the practical takeaway is not just “prices are better.” It is that better Waha pricing tends to make Permian barrels and molecules easier to move and easier to monetize. That usually feeds through to more gathering, compression, processing, treating and maintenance work across the basin, because those are the systems that have to handle higher volumes once takeaway opens up. That last point is partly an inference from the capacity additions and company commentary, not a direct quote, but it is consistent with MPLX saying this week that it is beginning operations at its Harmon Creek III processing plant in August and is expanding Permian sour-gas treating capacity. (ir.mplx.com) One caveat: the gas bottleneck may not be the only bottleneck for long. East Daley said this week that if Permian growth stays strong, crude oil pipeline capacity could become the next constraint even as gas takeaway improves. (eastdaley.com)