Reuters
U.S. spot natural gas prices at the Waha Hub in West Texas’ Permian shale closed in negative territory for a record 12th straight session on Monday, as pipeline constraints trap gas in the nation’s largest oil-producing basin and force some energy companies to pay other companies to take off the gas they produce.
Analysts have long pointed to negative prices as a sure sign that the Permian region, which spans west Texas and eastern New Mexico, needs more gas pipes. More pipes are expected to be built later this year, but there still aren’t enough to handle all the gas currently coming out of the basin’s ground. Permian gas production has set record highs every year since 2013, rising to an average of 27.6 billion cubic feet per day (bcfd) by 2025, enough to supply about a quarter of U.S. demand. The U.S. Energy Information Administration (EIA) projects Permian production to increase to 29.0 bcfd in 2026 and 29.6 bcfd in 2027.
Over the past five years (2021-2025), the basin’s production has surged by about 12% per year on average, making the Permian the fastest growing and second-largest gas-producing shale basin in the country, behind the Marcellus/Utica shale in Appalachia in Pennsylvania, Ohio, and West Virginia.
However, EIA forecasts that growth is expected to slow in the coming years, dropping to an average annual rate of about 4% in 2026 and 2027. 29dk2902l
“The Permian region is awaiting new pipeline capacity until growth resumes. We expect Permian gas production to increase (in the second half of 2026) with the addition of new pipeline capacity,” Bank of America analysts said in a note last week.
New pipe to rescue
Kinder Morgan expects the approximately $455 million Gulf Coast Express expansion to enter service in mid-2026, increasing the capacity of the existing 2.0 bcfd pipe by approximately 0.57 bcfd.
One billion cubic feet of gas is enough to supply about 5 million U.S. households with gas for one day. Another pipe under construction is the 2.5 bcfd Blackcomb project, scheduled to enter service in mid-2026, and is being built by private infrastructure company WhiteWater for the WPC joint venture and divisions of Targa Resources and MPLX. WPC is a joint venture between WhiteWater, MPLX and Enbridge divisions.
Once operational, Blackcomb will transport gas produced by several companies, including Devon Energy, Diamondback Energy, Marathon Petroleum and Targa Resources, from the Permian to the Agua Dulce region of South Texas. Later this year, Energy Transfer expects the first 1.5 bcfd phase of the approximately $2.7 billion Hugh Brinson Pipe from the Permian to the Dallas-Fort Worth region to enter service in the fourth quarter of 2026, followed by a 0.7 bcfd phase two in the first quarter of 2027.
negative price
Permian energy companies are willing to take some of the gas losses because they can offset those that make money selling oil. Negative gas prices were less common a decade ago, when environmental regulations were less stringent and many drillers could flare up or burn off some of the unwanted gas.
But in recent years, that gas has become increasingly valuable as a fuel for power generation used in power-hungry U.S. data centers and exported via pipelines to Mexico and to markets around the world as liquefied natural gas (LNG).
In the spot market, the average Wahahab price on Monday fell from -$2.16 on Friday to -$4.56 per million British thermal units (mmBtu) on Monday.
This marked the 12th consecutive day that Waha prices ended below zero. The previous record was 10 days in June 2025.
According to price data from financial firm LSEG, the Daily Waha price closed below zero for the first time 17 times in 2019, six times in 2020, once in 2023, 49 times in 2024, 39 times in 2025, and 21 times so far this year, setting a record high. Waha prices have averaged 76 cents per mmBtu so far this year, down from $1.15 in 2025 and a five-year (2021-2025) average of $2.88.
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