Permian Natural Gas Output Can Still Grow If E&Ps Move to ‘Maintenance Mode,’ Enterprise Execs Say

Enterprise Products Partners LP said Tuesday Permian Basin natural gas production will increase by 1.3-1.5 Bcf/d through 2027 even if crude oil prices fall and cause the oil production to plateau.

“We and others believe that $55-60/bbl puts the Permian more or less in a maintenance mode, and closer to $50 takes the Permian probably below maintenance,” said Tony Chovanec, senior vice president for fundamentals and supply appraisal.

Chovanec noted that any production cuts would likely begin with smaller exploration and production (E&P) companies. Of the 300 rigs operating in the Permian, about 75 are run by E&Ps with three or fewer rigs, he said. Enterprise’s customers, however, are some of the biggest and best positioned in the basin, management said.