Despite stringent capital discipline exercised by oil and gas producers in recent years, U.S. hydrocarbon production continues its impressive growth trajectory. The Permian shale play stands out as a major contributor to this expansion, defying expectations and consistently boosting hydrocarbon output. Notably, even as natural gas prices in the region occasionally dipped to near zero or even negative levels, Permian gas production continued to rise, primarily driven by the economics of crude oil. With crude oil prices soaring to $85 per barrel, this trend raises questions about the implications for the growth of Natural Gas Liquids (NGLs) and the capacity of midstream infrastructure to accommodate this surge in Permian NGL volumes. This article, first in a series of articles, will quantify asset utilizations across the Permian NGL value chain and provide perspectives on magnitude and timing of future midstream capacity additions in the Permian.

Permian raw gas production, comprising associated gas from crude production and lean gas, has surged from approximately 5 billion cubic feet per day (Bcf/d) in 2012 to around 25 Bcf/d by the end of 2023, marking a compound annual growth rate (CAGR) of 17% over an 11-year period. The Permian region’s abundance of crude oil brings with it a significant amount of wet gas, constituting 95% of the raw gas production. Correspondingly, wet gas production has similarly increased rapidly from around 3 Bcf/d in 2012 to approximately 23 Bcf/d by the end of 2023.