Whistler Pipeline Expansion to Add Gas Processing Connectivity and Boost Utilization

Strong points

Extends the Midland Lateral by 36 inches in Martin County, Texas

Rise for oil and gas production growth in the Midland Basin

Could increase use of Permian-Gulf Coast main line

The expansion of the Midland Basin lateral of Whistler Pipeline, recently announced by the owning consortium, promises to give producers in West Texas more leeway to increase oil and gas production through improved connectivity between area gas processing plants and the intrastate pipeline.

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Higher utilization rates on Whistler, likely to result from the upgrade, could potentially shorten the time frame for gas transmissions from the Permian Basin to the Gulf Coast to fill existing intermediate capacity.

In a press release issued late Jan. 26, Whistler Pipeline said its planned expansion would include the construction of a new 36-inch pipe running approximately 35 miles northwest of its existing line in the county. of Martin, Texas. The new construction will extend the existing 85-mile Lateral of Whistler’s Midland Basin with an expected in-service date of Q4 2022.

Supply and demand

Whistler Pipeline’s plan to expand access to gas processing plants in the Midland Basin comes as a rebound in global oil demand and soaring prices over the past year have revived interest in the drilling in the Permian.

At the end of January, more than 300 drilling rigs are currently in service in West Texas and New Mexico, as activity there returns to pre-pandemic levels, according to rig data. of Enverus.

The rebound in activity has fueled dramatic growth in Permian oil production, particularly over the past 12 months. According to a short-term production forecast from the US Energy Information Administration, production in the Permian could hit new records in February at over 5 million bpd.

However, with recent and stricter regulations on gas flaring and increased emphasis on environmental, social and governance issues, the continued growth of Permian oil production will depend on a steady development of the capacity of gas processing and midstream capacity in the basin, which has historically lagged behind the development of raw infrastructure.

Median capacity

In recent years, midstream developers have added more than 6,100 cfd of intrastate production capacity from the Permian, including Kinder Morgan’s 2,100 cfd Gulf Coast Express project, its latest pipeline 2.1 100 cfd on the Permian Highway and most recently the 2 Bcf/d Whistler Pipeline, owned by a consortium of MPLX, WhiteWater and joint venture partners Stonepeak and West Texas Gas.

However, with Whistler entering commercial service in August, the pipeline could be the last major Permian Basin take-out production project to come into service – potentially until the mid-2020s. In December 2020, Tellurian elected to scrap its proposed 2.3 bcf/d Permian Global Access Pipeline, leaving only a handful of other proposed Permian Coast-to-Gulf projects on the radar, none of which reached the FID.

As gas transmission volumes on the existing corridor along the West-East Texas Corridor continue to grow, many market analysts expect the Permian to be constrained again by mid-decade. , putting renewed pressure on gas prices in Permian hubs like Waha.

Smaller expansion projects in the Permian, aimed at improving upstream connectivity to gathering networks and treatment plants, could accelerate this process. The planned Whistler Pipeline expansion is just the latest of these projects.

In December, the start of the Double E pipeline added some 1.35 Bcf/d of median capacity to the heart of the Delaware Basin. The 135-mile pipeline project, a joint venture developed by Enterprise Products Partners and Energy Transfer Partners, now offers select producers in West Texas and New Mexico portions of Delaware new downstream connections to major transmission lines , including the Gulf Coast Express and the Permian. Road driving.

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