Gas prices in the Permian Basin are set to experience significant volatility in the coming years, with stability expected to return only after critical new pipeline infrastructure becomes operational in late 2026 and early 2027. Despite the recent addition of a 2.5 Bcf/d takeaway pipeline, Matterhorn, much of this relief has likely already been priced into the forward curve. As the region adjusts to the new pipeline capacity, challenges remain until the anticipated expansions come online.
The forward curve for Waha, which shows future delivery prices, reveals a notable disparity in pricing between spring 2025 and late January 2026, with a $2 difference between high and low forward prices. This pricing gap is expected to narrow as 4.5 Bcf/d of new pipeline capacity is added in late 2026, bringing relief to the region’s price fluctuations.
From a price risk perspective, the period from mid-2025 to the fourth quarter of 2026 is a critical time for Permian producers. If the basin’s gas supply increases rapidly enough to fill the newly commissioned pipeline in 2025, Waha prices could experience another downturn. Similar to the low demand or pipeline maintenance periods of 2024, there would be little margin for error if the region’s supply outpaces demand.
However, as new long-haul egress projects come online, the potential for heavily discounted prices in 2027 and beyond diminishes. These additional pipelines are expected to alleviate pressure on the region’s marginal molecules, contributing to greater price stability.
The Waha basis forward curve has seen a steady decline over the past six months, even after the commissioning of the Matterhorn pipeline in October. Comparing the current curve (dark blue) with those from three and six months ago (light blue and gray, respectively) highlights the evolving pricing outlook. Despite this trend, the forward curve’s inability to predict future pricing remains a key concern. Uncertainty surrounding factors like the pace of production growth and the volume of gas awaiting pipeline capacity suggests that pricing could remain volatile throughout 2025 and 2026.
Permian gas supply has been growing faster than initially expected, as noted by industry analysts and participants. This rapid production increase may lead to an accelerated fill of existing pipeline capacity, further complicating the region’s pricing outlook. The stacked chart above illustrates three major projects—GCX Expansion, Blackcomb, and Hugh Brinson—that are set to provide an additional 4.5 Bcf/d of takeaway capacity to West Texas.