Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas

Analysis: Permian natural gas producers cut production in May, lifting prices to positive territory

Electricity | Coal | Natural Gas | Natural Gas (North American)

Shades of the Past: US natural gas prices plunge to levels last seen in March 2016

LNG | Natural Gas | NGL

Platts LNG Alert

Capital Markets | Commodities | Electric Power | Natural Gas

Mexican Energy Conference, 24th

Natural Gas | Oil | Crude Oil

Norway considers oil output cut as OPEC+ talks hang in the balance

Analysis: Permian natural gas producers cut production in May, lifting prices to positive territory

Denver — Production averages 8.2 Bcf/d in May, down from March record highs

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

El Paso Permian averaging 39 cents, Waha at 29 cents

Permian Basin gas producers are dialing back production this month in an effort to shore up support for cash prices there following a brief foray into negative price territory in April.

Through first-half May, Permian output has averaged just under 8.2 Bcf/d, its lowest monthly average in 11 months, according to data compiled by S&P Global Platts Analytics.

Gas prices in the basin have responded to the downswing in output. In May, cash prices at El Paso Permian have averaged 39 cents/MMBtu; at Waha, prices are averaging 29 cents/MMBtu.

Both hub locations experimented with negative pricing last month, briefly trading at levels under minus-$7/MMBtu. During the full month of April, prices at El Paso Permian averaged minus-10 cents/MMBtu and at Waha, minus-19 cents MMBtu, S&P Global Platts data shows.

The record lows came as strong production levels and maintenance-related constraints left next-day gas supply stranded in the West Texas play.

In late April, Permian gas producer Apache said that it would defer about 250 MMcf/d of production from its Alpine High play in response to low gas prices at Waha.

"We anticipate relatively wide and volatile natural gas price differentials in the Permian Basin until the Gulf Coast Express pipeline enters service," Apache President and CEO John Christmann IV said at the time.

Since then, it's likely that other producers in the basin have made proactive moves to cut output -- particularly those with limited firm-transportation capacity that are more exposed to price volatility in the next-day cash market.


After reaching a record-high at over 9.4 Bcf/d in late March, Permian gas production has been edging steadily downward in recent weeks as producers trim output to levels comfortably below the basin's maximum production takeaway capacity.

Including local demand, which is capable of absorbing about 700 MMcf/d, Permian gas production becomes fully constrained at around 9.4 Bcf/d, according to Platts Analytics.

For many West Texas producers, the market outlook for Permian gas production will remain extremely volatile through October when Kinder Morgan's 2 Bcf/d Gulf Coast Express Pipeline is scheduled to enter service.

In late April, though, the startup of service on a key downstream segment of Fermaca's Wahalajara pipeline system marked a potentially new market opening for heavily discounted Permian gas supply.


On April 23, the downstream El Encino-La Laguna pipeline began receiving initial deliveries, signaling the possibility that Permian supply shipped westbound on Roadrunner Gas Transmission Pipeline could soon access new markets via the border-crossing Tarahumara Pipeline, Wahalajara's northern-most segment.

According to Platts Analytics, downstream demand on the Wahalajara system is likely to see its biggest boost upon completion of the Guadalajara interconnect in central Mexico. Recent construction status reports show that interconnection entering service sometime during third-quarter 2019.

Another potential outlet for Permian gas production could come from a connection to Mexico's national Sistrangas pipeline grid. The 70 MMcf/d interconnect at El Encino in Chihuahua state is being jointly developed by Fermaca and Cenagas, Mexico's national gas system operator.

The interconnect is expected to enter service sometime this year, although Sistrangas has yet to identify a new meter for the project.

-- J. Robinson,

-- Edited by Maya Weber,