The co-dependency between Gulf Coast LNG and Permian natural gas is spurring some much- needed therapy for both. This, in the form of new and expanded midstream systems to add more capacity and transportation from wellhead to downstream markets, especially export facilities. The U.S. is expected to export 11.8 BCFD of LNG this year, compared to 10.6 BCFD in 2022 when the Permian accounted for 30% of Texas LNG exports.
Reese Energy Consulting today is studying the growing urgency for added midstream infrastructure in the Permian to keep pace with record-breaking gas and LNG production. Save for two mega deals last year, midstream M&A activities were relatively slow to stimulate more investment and growth of existing systems. The largest exception was Targa’s $3.5 billion purchase of Lucid in June, which expanded its footprint in the Delaware by 600,000 acres, 1,050 miles of natural gas pipelines, and 1.4 BCFD of processing capacity. Since then, Targa has announced a slew of Permian midstream projects both completed and on track for completion this year and into 2024. Some of those include the recent start-up of its 230-MMCFD Red Hills VI processing plant and two 275-MMCFD plants under construction, all in the Delaware. Targa also is building two 275-MMCFD cryogenic processing plants in the Midland.