Natgas Prices at Waha Hub in Texas Fall to Record Low in Negative Territory

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Natural gas prices in the Permian shale basin in West Texas have turned negative a record number of times in 2024, including an all-time low for Friday, as pipeline and other constraints trap gas in the nation’s biggest oil-producing basin.

Spot gas prices for Friday at the Waha hub in West Texas fell by about 120% to a record low of minus $4.80 per million British thermal units (mmBtu).

That was the 21st time Waha prices averaged below zero in August and was lower than the prior record low of minus $4.76 on Aug. 9.

Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023. So far in 2024, Waha prices have averaged below zero 32 times.

Analysts have said that is a sure sign the region needs more gas pipes, which prompted a coalition of energy firms including privately-held WhiteWater to move forward in July with the Blackcomb pipeline.

Other energy firms, including Kinder Morgan and Energy Transfer, have also proposed new projects.

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There is, however, only one big gas project under construction in Texas that could relieve the severe pipeline constraints in the Permian region this year, the Matterhorn Express Pipeline.

In the past, Matterhorn Express projected the 490-mile (789-kilometer) pipe capable of moving up to 2.5 billion cubic feet per day (bcfd) of gas from the Permian to the Gulf Coast, could enter service in the third quarter of 2024, but most analysts now expect the project to start in the fourth quarter.

Matterhorn Express is a joint venture between units of WhiteWater, EnLink Midstream, Devon Energy and MPLX, according to WhiteWater’s website.

(Reporting by Scott DiSavino; editing by Jason Neely, Kirsten Donovan)