Yesterday, WhiteWater, Devon, and others announced 4.5 Bcfd of new Permian gas takeaway capacity via the new Solitude Pipeline: two 48-inch (!) lines to Katy, with one due online in late 2029 and the other in 2030. Permian gas takeaway was already set to grow ~11 Bcfd between mid-2026 and the end of 2029, between the Gulf Coast Express expansion; the in-service of Blackcomb, Hugh Brinson, and Eiger Express; and the Desert Southwest expansion on Transwestern.
Accounting for rising in-basin demand and exports to Mexico, filling that capacity would require 18 Bcfd of dry gas production growth, more than the ~17 Bcfd Appalachia managed in its fastest five-year stretch, from 2011-16. Every gas E&P fears what Permian gas growth could mean for Henry Hub prices. But a record pace of Permian gas production growth would require operators to drill more gas-weighted targets, which Permian E&Ps demurred on this earnings season.
Rather than an expectation that Permian gas production will match the pace of post-FID pipeline buildout, I read this project’s FID as revealing skepticism about Desert Southwest’s effective capacity and its ownership structure as suggesting a change in how Permian E&Ps view the risk-reward of gas takeaway commitments.