Waha Hub Spot Gas Base Spread Explodes on PHP Maintenance

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Strong points

PHP streams will be limited to 1.1 Bcf/d from May 3-6

Flows will increase to 1.8 Bcf/d from May 7 to 9

Then drops to 1.65 Bcf/d from May 10 to 13

Permian gas benchmark Waha Hub saw its base expand to cash Henry Hub widen on May 2 at its biggest discount since October 2020, ahead of scheduled maintenance on Kinder Morgan’s Permian Highway pipeline that will severely limit capacity eastbound delivery May 3-13.

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The 2.1 billion cubic feet per day Permian Highway pipeline carries gas from the Waha region of the Permian Basin eastward to the Katy region near Houston, supplying demand markets on the Pacific Coast. Gulf.

Waha Hub spot gas fell 66.50 cents to $5.485/MMBtu on May 2 for next-day flows, according to preliminary settlement data from S&P Global Commodity Insights, doubling its basis spread to cash Henry Hub at a discount of $1,815. El Paso spot gas in West Texas saw an even steeper decline in May 2 trading, falling 76.50 cents to $5.38/MMBtu, widening its discount to cash in on Henry Hub at nearly $2.


With less gas able to flow to the Gulf Coast from West Texas, spot gas prices from East Texas soared on May 2. Katy Hub gained 68.50 cents to trade at $7.205/MMBtu, while further south Agua Dulce gained 73 cents to trade at $7.17/MMBtu, according to preliminary settlement data.

With East Texas playing an increasingly important role in supplying the Southeast and its growing demand for LNG feed gas so far this year, the expected decline in supply from the East of Texas also likely passed through to Southeast gas spot prices, which rose significantly in May 2 trading. Preliminary settlement data shows Henry Hub up 46.50 cents to $7.30/MMBtu, with similar gains of 40-70 cents seen across the region.

PHP maintenance

Permian Highway Pipeline will begin scheduled maintenance work on its five compressor stations on May 3, with capacity expected to decrease from 1 Bcf/d to 1.1 Bcf/d from May 3-6, then increase to 1.8 Bcf/d from May 7 to 9, and drop to 1.65 Bcf/d until the scheduled end of maintenance on May 13.


Cash Waha discounts are likely to be greatest during the initial phase of May 3-6 maintenance work, with the gap expected to narrow on May 6 for May 7-9 streams, alongside the increase in 700 MMcf/d of available capacity for these flow days.

Permian Takeout Capacity

The spread from Waha Hub to silver Henry Hub has been largely isolated from similar blowouts since the Permian Highway pipeline went live in January 2021, adding an estimated 2 bcf/d of additional hauling capacity . The July 2021 commissioning of the 2 billion cubic feet per day Whistler pipeline provided even more relief to the Waha base.

Since then, Waha’s rebate has remained well below $1/MMBtu, except in sporadic cases of pipeline maintenance or repairs. Most recently, Waha Hub’s discount widened beyond $1 in the last week of March ahead of a scheduled four-day maintenance project on Gulf Coast Express.

With Permian gas production expected to increase over the next few years, a race will emerge between a host of proposed pipeline expansion projects and increased production volumes, with the spread of Waha Hub serving as a barometer of how this balance is balanced.

Kinder Morgan has offered to add up to 1.2 Bcf/d of capacity on its Permian Highway pipeline and Gulf Coast Express pipeline on April 20, although no investment decisions have been made as of May 2. Whistler Pipeline made a final investment decision on May 2 to increase capacity by 500 MMcf/d, with a targeted September 2023 commissioning.

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