U.S. hydrocarbon production continues to grow, even amid disciplined capital spending by oil and gas producers and increasing cost structures due to fast evolving Tariff situation. The Permian shale play stands out as a major contributor to this expansion, defying expectations and consistently boosting hydrocarbon output despite cost pressures. It is therefore no surprise that midstream companies are relying on Permian for organic growth across commodities including Natural Gas Liquids (NGLs). Understanding and navigating the complexities of the evolving NGL takeaway pipeline situation from the Permian Basin is essential for stakeholders across the energy sector to effectively manage risks, safeguard commodity values/netbacks and capitalize on growth opportunities in this dynamic environment. It appears that take-away concerns on NGL’s may not be dominating the headlines for few years to come.

Current Permian NGL Pipeline Egress

Over the past year, several NGL pipeline expansions have collectively added approximately 675 MBPD (Thousand barrels per day) of new takeaway capacity from the Permian—bringing meaningful relief and enhancing flow assurance and flexibility for gas producers. Notable NGL pipeline projects include:

• Targa’s Daytona Pipeline, completed in Q3 2024, added 400 MBPD of capacity from the Permian into the Grand Prix 30” trunkline in North Texas, delivering volumes to Mont Belvieu.
• ONEOK’s WTX LPG looping expansion, completed in Q4 2024, added 150 MBPD of additional throughput capacity.
• The BANGL JV (a joint venture within the EPIC Pipeline system) commissioned pump station expansions in Q1 2025, increasing their undivided joint interest (UGI) capacity by 125 MBPD—bringing their total UGI share to 250 MBPD. In conjunction, BANGL constructed a new pipeline in 1Q 2025 with capacity of 250 MBPD from Gardendale to Sweeny/Texas City. These additions enable MPLX’s planned downstream fractionation and export opportunities at Texas City.

As of 1Q 2025, aggregate NGL pipeline capacity downstream of the Permian basin stands at ~84% utilization, down from ~ 95% utilization just a year earlier.  The added capacity has meaningfully reduced many bottlenecks from the Permian.

Pipeline Utilization Disparities and Egress Risk

Despite availability of spare pipe capacity for Permian NGLs in aggregate, there are some significant regional disparities in utilization rates across key NGL pipelines. Among the nine major pipelines transporting NGLs from different sub-basins to Mont Belvieu/Sweeny fractionation hubs, three are currently operating at or near capacity. Monthly fluctuations in usage render some pipelines’ available capacities unpredictable, necessitating nuanced planning to protect NGL netbacks for producers.

Upcoming Incremental Capacity Additions

Expectations of favorable oil prices will likely continue to add significant NGL volume out of Permian.  The relief felt from the pipeline additions in the last year has been helpful, but will it address all of the needs out of the basin in the future? In aggregate, ~0.845 MMBPD of new pipelines and pipeline expansions are in progress to be in service by 2H 2026 making way for the expected growth in NGLs for the foreseeable future.

With ample aggregate capacity projected beyond 2026, competitive dynamics among midstream operators are likely to intensify. Strategic positioning, customer retention, and asset utilization will become focal points as infrastructure providers work to secure throughput and protect market share.

Though additional expansions underway look to solve the aggregate problem of getting NGL’s out of the Permian Basin, questions linger on long-term sufficiency in accommodating projected NGL growth in certain locations. Therefore, aligning NGL marketing strategies with market realities, such as securing firm transport capacity versus relying on walkup capacity, is pivotal.

Commercial Implications

Recent pipeline expansions have provided much-needed relief to the Permian NGL transport system, but risks remain—particularly on individual pipelines and regional corridors that are nearing full utilization. Producers and midstream operators reliant on these constrained systems continue to face exposure to bottlenecks, price discounts, and operational uncertainty. Key considerations include evaluating existing pipeline capacities, monitoring processing plant expansions, forecasting impacts of ethane extraction, and adapting swiftly to market shifts to maximize commodity value.  Stay informed as Enkon continues to delve deeper into these critical dynamics in upcoming articles, offering insights and strategies to navigate the evolving landscape of Permian basin NGLs.

-Sue Neville

If you are interested in Permian NGL outlook and obtaining a detailed analysis on the overall investment risk in this sector, please contact us at info@enkonenergy.com. We encourage you to subscribe to our articles to get weekly articles via email.

Enkon Energy Advisors is a boutique consulting firm specializing in oil & gas, and energy transition since 2012. We bring deep expertise in a range of markets including natural gas, NGLs, Oil, LNG, and Energy Transition where we provide commercial and market advisory to investors, energy companies, and project developers with consulting services, subscription reports, and analytics, with the goal of delivering commercially actionable outcomes to our client.