Waha natural gas prices fall to -$2.25/MMbtu
Natural gas prices at the Waha hub in West Texas fell into negative territory Oct.25, 2022, as surging Permian basin production collided with offtake constraints. Spot market pricing for next-day delivery dropped as low as -$2.25/MMbtu. Front-month Henry Hub-basis NYMEX futures transacted at $5.613/MMbtu on the same day.
Ongoing repairs at Freeport LNG’s 2.1-bcfd plant on the Texas coast have removed it as a destination for Permian gas. At the same time, scheduled maintenance on Kinder Morgan’s 2-bcfd Gulf Coast Express pipeline, which delivers Permian supplies to South Texas liquefaction plants and pipeline export markets, has reduced its capacity by 700 MMcfd.
Other gas shipment routes out of the Permian have also been constrained. Maintenance on Kinder Morgan’s El Paso Natural Gas Line 1300 has dropped westward shipments by 200-300 MMcfd, with compressor maintenance on a second line reducing northbound takeaway capacity by another 700 MMcfd. Softening demand for southbound deliveries into Mexico since May has also reduced shipments on Energy Transfer Partners LP’s 1.4-bcfd Trans-Pecos Pipeline.
[UPDATED Oct. 27 to include capacity-reduction details.]
Christopher E. Smith | Editor in Chief
Christopher brings 27 years of experience in a variety of oil and gas industry analysis and reporting roles to his work as Editor-in-Chief, specializing for the last 15 of them in midstream and transportation sectors.