Two new nomination points connected to the expansion of the Gulf Coast Express have appeared near Agua Dulce, Texas, Wood Mackenzie said on Thursday, with initial nominations of 50,000 million British thermal units per day into Tennessee Gas Pipeline, and 20,000 MMBtu/d into Natural Gas Pipeline of America.
This adds 570 million cubic feet per day to capacity and increases GCX system capacity to about 2.57 bcf/d from Waha to Agua Dulce, it said.
Waha cash prices have reacted, rising to $0.315/MMBtu for the June 16 flow date, following a lengthy spell of weakness, with more than 130 days of negative pricing so far this year, with a low-point of -$9.52/MMBtu on April 16, Wood Mackenzie said.
The early flows look commercially meaningful with Waha prices moving from -$1.03/MMBtu on June 8 to -$0.34/MMBtu the next day and reaching positive figures by June 16 for the first time since February.
Nominations into NGPL and TGP confirm commissioning is taking place and indicate that "debottlenecking" is taking place in the Permian Basin, the note said.
An underlying imbalance persists however, with Permian production about 24 bcf/d which should rise above 29 bcf/d by 2030.
Wood Mackenzie said that more infrastructure will be needed to keep price normalization going, with upcoming projects like Blackcomb Pipeline and Hugh Brinson Phase 1 to add about 4 bcf/d of additional takeaway by the end of the year.
Price dynamics are likely to remain reactive to incremental capacity additions and progress with commissioning rather than reflect a rebalanced market meanwhile.