Supply growth has reinforced the need for new infrastructure. Associated gas production in the Permian increased at a compound annual rate of 20% from 2014 to 2024, reaching 12.5 bcfd in 2024, according to EIA. This volume represented 47% of total Permian natural gas production and was 9% higher than in 2023.
The report cited Dean Foreman, chief economist of the Texas Oil & Gas Association, who noted spot prices turned turned negative in the spring months of 2020, 2023, and 2024 at Waha because of seasonal anomalies that drive excess regional supply. Thure Cannon, president of the Texas Pipeline Association, was cited noting limited pipeline takeaway capacity and weak local demand contribute to depressed Permian pricing relative to the Texas Gulf Coast, particularly during shoulder months from March to May and October to mid-December.
According to Morningstar, Waha natural gas prices in 2025 have experienced considerable volatility, predominantly trending downward. With prices deep into the red as of September and deeply discounted relative to the Henry Hub natural gas spot price benchmark for most of 2025, there is an obvious need for significantly more Permian natural gas pipeline takeaway capacity.
TC Energy Corp. supplies around 30% of daily natural gas consumption in North America through its 58,100-mile pipeline network, according to the report. On its third-quarter 2025 conference call, chief executive officer François Poirier stated that the company’s forecast expects North American natural gas demand to increase by 45 bcfd by 2035, driven primarily by a tripling of LNG exports and unprecedented power demand from data centers and coal-to-gas conversions. This growth would raise gas demand to about 170 bcfd by 2035, an increase of over 35%.
Total US pipeline capacity additions in 2026 will be the highest since 2008, when Henry Hub prices peaked above $13/MMbtu. In contrast, the recent 2025 Henry Hub prices were around $4/MMbtu. High returns backed the significant investment in natural gas pipeline projects. Energy Transfer LP and Targa Resources Corp. are among the major midstream companies investing in the Permian. Energy Transfer stated in its 2026 outlook that it targets returns less than 6 times EBITDA build multiples on its pipeline expansions. Targa Resources has averaged a 21% return on invested capital over the past 5 years through 2024 and projects a similar return on growth capital for 2025.
The regulatory environment in the US has shifted to support the growth of oil and gas infrastructure by streamlining the permitting process. The current Trump administration is building on previous reforms to the National Environmental Policy Act (NEPA) to significantly shorten review timelines.
