DeLa Express LLC took the next steps toward gaining FERC approval to construct the 2 Bcf/d interstate pipeline project to move natural gas out of the Permian Basin.
The Federal Energy Regulatory Commission in late June gave the affiliate of Houston-based Moss Lake Partners LP 20 days to respond to three comments regarding preliminary reports for the 42-inch diameter, 690-mile pipeline. Most were with regard to land, environmental and cultural surveys, along with the proposed pipeline route.
DeLa Express filed a FERC request in early April to begin the pre-filing review for the pipeline that would provide firm transportation of liquids-rich natural gas from West Texas to Gulf Coast markets for liquefied natural gas and natural gas liquids (NGL) exports. They would include Moss Lake’s affiliated NGL export project, Hackberry NGL.
“NGL production is still rising but domestic demand is flat, resulting in an NGL exports surge and a race to develop new export capacity,” RBN Energy LLC’s Housley Carr said.
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The Permian’s associated gas is ripe to meet the growing demand for NGL purity products such as ethane, propane and butanes at Gulf Coast petrochemical plants and in overseas markets, according to Carr. As such, “burgeoning NGL production has required an extended, far-reaching buildout of new infrastructure.”
At the same time, natural gas prices in the Permian have struggled this year amid tight pipeline capacity. The regional benchmark Waha hub averaged only 46.0 cents/MMBtu on Thursday, up 13.0 cents day/day, NGI data show.
Waha hit its highest price of the year so far in January at $8.305, but sank into negative territory in March and has struggled to regain momentum. The price fell to the year’s low of negative $4.595 in May and has been drifting from positive to negative ever since as the region continued to grapple with a lack of available capacity to move gas out of the basin.
For comparison, Henry Hub slid 2.0 cents day/day to $2.000 on Thursday. The U.S. benchmark spot spanned between $1.245 and $13.080 since January, according to NGI data.
DeLa Express joins other pipeline projects like Matterhorn Express Pipeline, due online later this year, in aiming to ease the West Texas supply glut. Unlike other supply basins that have seen lower volumes this year in response to low gas prices, Permian production is averaging about 16.6 Bcf/d this year, according to Bloomberg estimates. This is not far off all-time highs and comes in spite of the price routing.
DeLa Express is targeting a July 2028 in-service date for the pipeline, which would originate in West Texas near Red Bluff in Loving County. It would terminate near Moss Bluff in Calcasieu Parish, LA. A certificate application is expected to be filed with the Commission in February. Construction could start by June 2026.
