Canadian energy company Enbridge said on Tuesday it launched a non-binding open season for its proposed West Texas Express natural gas pipeline to transport gas west from the Waha area of the Permian Shale to markets in and around El Paso, Texas.
The Permian is the biggest oil-producing shale basin in the United States. Gas production associated with oil production in the Permian, which is located in West Texas and eastern New Mexico, also makes the basin the fastest growing and second biggest gas-producing shale basin behind the giant Marcellus and Utica shale regions in Pennsylvania, Ohio and West Virginia.
Most producers in the Permian are seeking oil, but as more oil and gas are produced, the U.S. Energy Information Administration has said that pressure within the reservoir declines and gas is easier to produce at lower pressures, boosting the gas-to-oil ratio.
The gas-to-oil ratio has steadily increased over the past five years to an average of nearly 4,200 cubic feet of gas per barrel of oil (cf/b), a 16% increase from around 3,600 cf/b in 2021, according to EIA data. More gas means more pipelines and other energy infrastructure are needed to process and transport that fuel.
Enbridge, which transports about 20% of the gas consumed in the U.S., said its proposed West Texas Express project responds to growing demand for reliable gas supplies from proposed power generation, utilities, generators and industrial customers such as data centers across West Texas and markets in Mexico, New Mexico and Arizona.
West Texas Express is currently expected to include more than 150 miles of new pipeline with an initial transportation capacity of up to 2 billion cubic feet per day. One billion cubic feet of gas can supply around five million U.S. homes for a day.
Enbridge said it is targeting an in-service date in the fourth quarter of 2029 subject to securing sufficient commercial support and obtaining required approvals.
The non-binding open season began September 10 and will close on September 25.
(Reporting by Scott DiSavino, editing by Deepa Babington)