Several recently completed pipeline projects in Texas and Mexico have increased natural gas transportation capacity to the Gulf Coast and Mexico from the Waha Hub, a natural gas trading hub in the Permian Basin.
Since October 2020, two completed projects in Texas and two completed projects in Mexico have increased the Waha Hub’s connections to markets and helped boost U.S. pipeline exports to Mexico which totaled 5.9 billion cubic feet per day in March 2021, up nearly 10 percent since March 2020, the Energy Department said Tuesday.
Those recently completed pipeline projects include Houston pipeline operator Kinder Morgan’s 2.1 billion cubic feet per day Permian Highway Pipeline, which entered service in January and delivers natural gas from the Waha Hub to Katy and Mexico. The pipeline project has faced stiff opposition and legal action from environmentalists and landowners citing concerns over safety, contamination of local aquifers and endangered species that have made those underground waters their home.
Willie Nelson and Paul Simon in August 2020 penned a letter to the Houston Chronicle urging the public to speak out about Kinder Morgan’s Permian Highway Pipeline after a drilling crew in April 2020 hit an air pocket and pumped 36,000 gallons of drilling fluid into the Trinity Aquifer. Then in July 2020, more drilling fluid started sprouting from the ground near Fredricksburg as crews continued the pipeline’s construction, affecting six fresh water wells used by Hill Country residents. Kinder Morgan in August of last year rerouted the pipeline project around the Blanco River.
The pipeline projects also include Austin’s Whitewater/MPLX’s Agua Blanca Expansion Project, which entered service in late January. It connects to nearly 20 natural gas processing sites in the Delaware Basin and can move 1.8 billion cubic feet per day of natural gas to the Waha Hub. By the third quarter of 2021, the project is expected to expand to connect with the Whistler Pipeline to move an additional 2.0 billion cubic feet per day of natural gas from the Permian Basin to the Texas Gulf Coast.
Mexico-based Fermaca’s 900 million cubic feet per day Villa de Reyes-Aguascalientes-Guadalajara pipeline began commercial operations in October 2020. The pipeline, located in Central Mexico, connects the Waha Hub to Guadalajara and other population centers in west-central Mexico.
The 500 million cubic feet per day Samalayuca-Sásabe pipeline from Carso Energy, headquartered in Mexico City, began commercial flows of natural gas in late January. The pipeline provides a more direct route for natural gas from the Permian Basin to northwest Mexico.
The additional capacity from the projects has helped increase natural gas prices at the Waha Hub, narrowing its price difference to the Henry Hub, a market-clearing pricing concept based on the actual supply and demand of natural gas as a stand-alone commodity.
Over the past few years, constrained capacity in the Permian Basin kept Waha prices at $1 per million British thermal units or more below the Henry Hub price. Natural gas prices at the Waha Hub began to increase in late October 2020, narrowing that difference.
From March through May of this year, the Waha Hub price averaged 22 cents per million British thermal units less than the Henry Hub price, following a February cold snap in Texas that temporarily sent Waha prices to a record high.
Read it from houstonchronicle – Photo as posted on houstonchronicle (
Kinder Morgan’s Permian Highway pipeline, which runs through Texas Hill Country, has faced fierce local opposition.Brett Coomer, Houston Chronicle / Staff photographer)
