For more than a decade, gross production of natural gas in the Permian Basin has continually increased. In 2022, it hit a new extraction record, producing 21,000 million cubic feet per day (Bcf/d).
According to the EIA Drilling Productivity Report, this figure is 14% higher than the previous year's production, and the trend continues to grow into 2023.
The Permian Basin, spanning parts of western Texas and eastern New Mexico, is known for crude oil production. Hence, producers must plan their activities around the price fluctuations of this hydrocarbon.
This contrasts with the Appalachian Basin, which covers Pennsylvania, West Virginia, and Ohio, where well-drilling activities are primarily focused on natural gas, making production less directly responsive to crude oil prices.
Increased Capacity in Natural Gas Pipeline Companies
The rise in natural gas production has prompted companies responsible for transportation to other destinations to expand their extraction capacities. In an effort to channel more production to consumer markets and LNG terminals on the US Gulf Coast, companies announced that an additional 4.2 Bcf/d of new pipeline capacity would come online by the end of 2024.
The EIA provides details on these expansions on its website:
The Whistler Pipeline is expanding its compression capacity by installing three new compressor stations on the pipeline, which will increase capacity by 0.5 Bcf/d to a total of 2.5 Bcf/d. This project is expected to commence service in September 2023.
The Permian Highway Pipeline is also expanding compression, increasing its capacity by 0.55 Bcf/d to a total of 2.65 Bcf/d, with service expected to start in November 2023.
The Gulf Coast Express Pipeline will expand its compression, raising capacity by 0.6 Bcf/d to 2.65 Bcf/d by December 2023.
The Matterhorn Express Pipeline plans to add 2.5 Bcf/d of extraction capacity by Q4 2024. This 490-mile-long pipeline will transport natural gas from the Waha Hub to Katy, Texas."
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