For the better part of the past decade, takeaway capacity has failed to keep pace with the Permian Basin\u2019s rapidly expanding associated gas production, leading regional prices to trade at a persistently sharp discount to Henry Hub as they frequently dive into negative territory.<\/p>\n
But that dynamic may flip in the second half of 2026, and beleaguered producers are banking on much-needed relief.<\/p>\n
East Daley Analytics Senior Director Jack Weixel told Energy Intelligence a shift how both end-users and producers approach contracting has the market less concerned about an apparent overbuild in takeaway capacity.<\/a><\/p>\n \u201cUtilities and data centers will use the firm transport that they\u2019ve signed up for<\/a>, so pipelines \u2026 with large utility commitments will fill,\u201d he said. \u201cProducers, on the other hand, have grown tired of negative basis at Waha.”<\/p>\n East Daley believes producers are making a bet that stronger Waha prices will offset the reservation rate cost they have committed to on various pipes. <\/p>\n “How do you stabilize Waha prices? Well, in this instance, you overbuild so the market is no longer constrained,\u201d he explained.<\/p>\n East Daley forecasts 9.1 billion cubic feet per day of incremental takeaway capacity from the Permian will enter service through the end of 2030. Over the same period, they predict the region’s associated gas production will grow by 6 Bcf\/d, leading to a 3.1 Bcf\/d overbuild.<\/p>\n Crude oil takeaway constraints are likely to curb associated gas production growth well before producers can fill those pipelines, according to Weixel.<\/p>\n \u201cYou’d run out of crude oil egress capacity at about 8 Bcf\/d [of associated gas production growth],\u201d he said. \u201cEven if you wanted to fill all that incremental gas capacity, you wouldn\u2019t be able to move the crude out of the basin.\u201d<\/p>\n Short-Term Pain, Long-Term Gain<\/b><\/p>\n