The United States’ midstream output capacity relies heavily on operations in the Permian Basin. The region holds some of the cheapest and most profitable wells anywhere in the international energy market and has become the cornerstone of the US gas and oil market. Several of the world’s largest energy companies have been developing their assets in the Permian over the past year, with some purchasing entire energy assets, while others lay down plans to expand pipelines in the Permian to feed the insatiable appetite for gas and oil in the US energy market.
The Permian Basin dominates the US energy market and shows no signs of slowing down
The Permian spans across Texas into a few other US states, like New Mexico, and has, over the years, become the backbone of the US energy market. With companies aiming to reap the rewards of a new directive issued by the Donald Trump administration, the future of the US energy market is heavily dependent on operations in the Permian.
The Permian has seen some of the iconic American energy companies outlining plans to boost gas and oil production, such as the Blackcomb Pipeline, which is being developed by a joint venture led by WhiteWater. The new pipeline will add a 2.5 Bcf/d Permian–South Texas connector, with expectations for the project to be completed sometime next year.
The US gas and oil market has received the backing of the most infamous US President in recent memory
When Donald Trump ran for his second term in the most powerful office in the world, he insisted he would develop a framework to move the UYS towards a new energy future led by the traditional oil and gas sectors. Trump has been actively rolling back permits for renewable energy generation projects and even cancelled federal funding for a hydrogen hub in California.
Targa Resources has been building its assets in the Permian Basin
The iconic energy company has stated that it plans to purchase Stakeholder Midstream for an eye-watering $1.25 billion. The deal includes several assets in the Permian that Targa expects to add over $200 million in annual cash flow to the company’s books. By acquiring the vast assets of Stakeholder Midstream, Targa Resources has expanded its output capacity in a part of the world with insane amounts of natural energy resources.
The US government has been incentivising energy companies that operate in the Permian under the 45Q rule, and since Targa plans to increase its already impressive footprint in the Permian, the government will surely view this as a positive deal and approve the acquisition. Targa has already revealed its plans to construct the all-new 500-mile ‘Speedway” pipeline in the Permian.
Building on the substantial dominance of the Permian basin operators are several new pipelines which will increase gas flow to the US market, positioning the US as the world’s largest gas producer by capacity. Targa has focused its expansion ambitions on the Permian and is developing a pipeline infrastructure that competes with the best in the international energy market.
New reports and analysis note that the pipeline expansion is set to hit us over the coming years
Targar Resources’ significant acquisition of Stakeholders Midstream exemplifies the sentiments for gas production in the United States. Amid the calls by the international community to diversify energy output and include more renewable energy projects as part of future growth plans, a new report has painted a pretty picture for the expansion of the global pipeline sector. While the world figures out which direction it wants to head for the energy sector, gas can serve as a great transitional energy resource in the meantime.
