The biggest oil play in the United States is the Permian, located in West Texas and southeastern New Mexico. In March, MDN warned readers that natural gas in the Permian, which is a byproduct of the oil wells drilled there (i.e. “associated gas”), is increasingly competing with Marcellus/Utica gas (see “Free” NatGas in Texas Permian Changes Shale Gas Economics in M-U). A few weeks later we shared a Bloomberg article in which we learned the price of natgas in the Permian at major trading hubs is now lower than the price for hubs around the Marcellus/Utica (see Natural Gas Prices in Texas Permian Drop Below Marcellus/Utica). Our narrative continues with insights from the experts at RBN Energy. In a recent blog post, RBN looks at the three markets where Permian gas can flow out of the basin: “west to Arizona and California, south to Mexico and north to the Midcontinent and Midwest gas markets.” The route north to the Midwest is now being pursued by Permian gas, and that gas is competing with Marcellus/Utica gas molecules that travel to the Midwest via the Rockies Express and Rover pipelines…
