Texas natural-gas pipeline eases bottlenecks, paves way for higher shale output

[libertybele]

Texas natural-gas pipeline eases bottlenecks, paves way for higher shale output

MIDLAND, Texas, Oct 18 (Reuters) - A new pipeline carrying shale natural gas from west Texas toward export hubs on the U.S. Gulf Coast has eased constraints that crashed local prices this year, and will help pave the way for higher U.S. oil production, energy executives said.
Pipeline companies largely quit adding new capacity following the pandemic, when shale production dried up and pipeline utilization plummeted. The 580-mile (933-km) Matterhorn Express pipeline is the first new natural-gas pipeline built in the Permian basin in three years.
Matterhorn began operations last month, relieving bottlenecks that had forced producers at times to pay other parties to receive their gas, or to seek state permits to burn the gas.
The line, a joint venture between WhiteWater Midstream, EnLink Midstream (ENLC.N)
, opens new tab, Devon Energy (DVN.N), opens new tab and MPLX (MPLX.N)
, opens new tab, can carry up to 2.5 billion cubic feet of gas per day, adding 14% in new regional capacity as it ramps up this year.
The Permian basin, which straddles Texas and New Mexico, accounts for half of U.S. crude output and is the second-largest shale-gas producing region.
"Matterhorn has freed up space, and the price we are getting for gas now has been positive for almost a month," said Mike Oestmann, CEO of Midland producer Tall City Exploration. "We produced a lot of gas that we not only didn’t get paid for, we paid for it to be taken away,” he added.
Gas prices at the Waha hub in west Texas have been broadly pricing above zero since mid-September, after Matterhorn started operating. Last week, Waha prices reached their highest level since mid-June, at $2.35 per million British thermal units.
For oil and gas producers, the pipeline is helping drive up profits with gas fetching higher prices, allowing them to increase crude production growth with less gas flaring, analysts said. Natural gas is a byproduct of oil production................

https://www.reuters.com/business/energy/texas-natural-gas-pipeline-eases-bottlenecks-paves-way-higher-shale-output-2024-10-18/

[Smokin Joe]

Roughly 20% of the natural gas out there comes from oil wells as "associated" gas. It is dissolved in the oil. Regulations require capturing that gas and processing it for market, or obtaining permits for flaring that gas if no means to gather and process it exist. The only way to reduce the production of that associated gas is to cut back on the production of the oil it is dissolved in. Nearly 100% of oil wells have some associated gas production.
This is why natural gas and flaring regulations can affect oil production.

[IsailedawayfromFR]

Only possible as it is not interstate so beyond the reach of the feds.

Go Texas