South Texas is emerging as the newest premium destination for natural gas supply in the U.S. The demand in the area is expected to grow much faster than the local production. This will create a natural gas supply shortage in the region by early 2018. New pipeline capacity will be needed to move incremental supply into South Texas. There are several projects planned to facilitate southbound capacity on pipelines running along the Gulf Coast Industrial Corridor.
The bottom line is that as of today, there isn’t enough pipeline capacity available. It will require the reversal of more existing pipelines and new pipeline capacity to bring more gas into the South Texas market. In fact, there are several projects already in the works to facilitate that and more are likely on the way.
The proposed changes to the interstate capacity announced so far will not be enough, and more pipeline projects will be needed to stave off supply constraints in the 2019/2020 period.
For a deeper look into the industry changes and opportunity in South Texas be sure to check out RBN Energy here.
Thanks to RBN Energy and Sheetal Nasta for this info.