What the Permian Link Project Means for Permian Natural Gas

On May 12^th, Natural Gas Pipeline Company (NGPL) announced a non-binding open season for a greenfield pipeline called the Permian Link Project that aims to provide natural gas takeaway capacity out of the Permian. According to the announcement, this project will provide bi-directional services linking the Permian market area near Pecos County, Texas with the company’s Midcontinent (Midcon) Zone in the Texas Panhandle. From there, gas could either connect to the company’s existing NGPL pipeline or move east to Beckham County, Oklahoma. With a proposed in-service date of July 2030, the project is intended to provide 2.1 Bcf/d of northbound capacity and 0.5 Bcf/d of southbound capacity, while also serving new demand along its path into the Texas Panhandle and providing access to NGPL's storage assets.

Current state of NGPL Flows

NGPL currently transports roughly 500 MMcf/d of gas from the Permian Basin northward to Kansas and Oklahoma in the Midcon region. Since 2024, NGPL flows out of the Permian have averaged over 95% utilized on an annual basis. Once gas reaches the Texas Panhandle, it can either move east into Oklahoma or north into Kansas. Flows have averaged 84% utilized at Station 801 in Oklahoma since the start of 2025, with only 0.64 Bcf/d of spare capacity during that time. This leaves little room to push additional volumes east. Northbound flows into Kansas at Station 104 have averaged 0.97 Bcf/d during that same timeframe, with utilizations averaging 78%. With limited spare capacity across both paths, as only ~300 MMcf/d could move further downstream, demand across Oklahoma, Kansas, and the Texas Panhandle is expected to absorb most of the volumes from the project.

No time like the present

This pipeline announcement comes on the heels of record-low pricing at Waha, highlighting the need for new natural gas takeaway capacity out of the Permian. The Permian Link Project would allow more gas to flow north, providing access to NGPL Midcon pricing, where basis has averaged ($1.07)/MMBtu so far in 2026 compared to Waha basis averaging ($6.75)/MMBtu, a spread of nearly $5.70/MMBtu, over the same timeframe. Some relief for Waha pricing is expected later this year, as the Gulf Coast Express Expansion, Blackcomb, and Hugh Brinson Phase I pipelines are all expected to come online by year end and add just over 4.5 Bcf/d of takeaway capacity out of the basin. These additional supply outlets should allow the spread between Waha and NGPL Midcon to tighten. This is supported by the forward curve, which shows NGPL Midcon is set to average just over a $1.00/MMBtu premium to Waha in 2027 and 2028. Further out, the 3.7-Bcf/d Eiger Express Pipeline is expected to come online in 2028, narrowing the premium further as Waha strengthens, with the NGPL Midcon forward curve pointing to only a $0.40/MMBtu premium to Waha in 2029 and 2030.

Going forward

Over the past few years, numerous takeaway projects that could help debottleneck the Permian have been announced. Among them is Tallgrass's Permian-to-REX project, which would also move gas northbound out of the Permian but terminate further north at the Rockies Express Pipeline. However, there has been little public commentary or advancement on the project since its announcement in Spring 2025.

Similarly, the Permian Link Project represents a significant potential addition to Permian takeaway infrastructure. But with several other pipelines already set to come online in the near term, the market may look quite different by the time the project is in service, as more takeaway capacity will allow for basis to tighten. With NGPL highly utilized further north and east, the Permian Link Project will largely depend on demand growth across the Texas Panhandle and the Oklahoma and Kansas portion of the Midcon zone. That said, if debottlenecking opportunities emerge on NGPL, additional volumes could reach markets further downstream, further strengthening the case for the project.

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