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Texas natural-gas pipeline eases bottlenecks, paves way for higher shale output
By Georgina McCartney
MIDLAND, Texas (Reuters) – A new pipeline carrying shale natural gas from west Texas toward export hubs on the U.S. Gulf Coast has eased constraints that crashed local prices this year, and will help pave the way for higher U.S. oil production, energy executives said.
Pipeline companies largely quit adding new capacity following the pandemic, when shale production dried up and pipeline utilization plummeted. The 580-mile (933-km) Matterhorn Express pipeline is the first new natural-gas pipeline built in the Permian basin in three years.
Matterhorn began operations last month, relieving bottlenecks that had forced producers at times to pay other parties to receive their gas, or to seek state permits to burn the gas.
The line, a joint venture between WhiteWater Midstream, EnLink Midstream, Devon Energy and MPLX, can carry up to 2.5 billion cubic feet of gas per day, adding 14% in new regional capacity as it ramps up this year.
The Permian basin, which straddles Texas and New Mexico, accounts for half of U.S. crude output and is the second-largest shale-gas producing region.
“Matterhorn has freed up space, and the price we are getting for gas now has been positive for almost a month,” said Mike Oestmann, CEO of Midland producer Tall City Exploration. “We produced a lot of gas that we not only didn’t get paid for, we paid for it to be taken away,” he added.
Gas prices at the Waha hub in west Texas have been broadly pricing above zero since mid-September, after Matterhorn started operating. Last week, Waha prices reached their highest level since mid-June, at $2.35 per million British thermal units.
For oil and gas producers, the pipeline is helping drive up profits with gas fetching higher prices, allowing them to increase crude production growth with less gas flaring, analysts said. Natural gas is a byproduct of oil production.
“If you cannot move the gas out and you have to increase flaring levels or bring in other mitigating measures, then that just really puts a ceiling on how much oil you can produce,” said Jason Feit, advisor at consultancy Enverus.
Matterhorn will help unlock higher Permian oil output, said David Seduski, head of North American gas analysis at consultancy Energy Aspects. It estimates Matterhorn carried 0.6 bcf/d last week.
Most of the Permian’s estimated 2025 oil-production growth would be unfeasible without more gas pipeline capacity, said Seduski, who forecasts an additional 350,000 barrels per day next year.
A fifth of Permian oil producers polled in September reported plans to increase well completions once the pipeline bottleneck is cleared, according to the Federal Reserve Bank of Dallas’ quarterly energy survey.
Permian crude-oil production is forecast to rise by 6.1% to 6.27 million bpd this year, and hit 6.5 million bpd next year, according to the Energy Information Administration, due in part to improved drilling efficiency.
SHORT-TERM RELIEF
Matterhorn will likely be filled next year, resulting again in pipeline constraints, market participants said.
Permian gas production is set to swell to 24.5 bcf/d for 2024, from 22.7 bcf/d in 2023, according to the EIA. It is projected to reach 25.8 bcf/d in 2025.
“Matterhorn only gives you so long, maybe 12 to 18 months, and then you need another pipe,” Jim Simpson, CEO of advisory firm East Daley, said in an interview.
The Blackcomb gas pipeline, which reached final investment decision in July, will move another 2.5 bcf/d of natural gas from the Permian to south Texas. It will start up in the second half of 2026.
The period between Matterhorn filling and Blackcomb starting operations may depress Waha gas prices as producers face more bottlenecks, said Jay Stevens, director of market analytics at Aegis Hedging.
(Reporting by Georgina McCartney in Midland, Texas; Editing by Rod Nickel)
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
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Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
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Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
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Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
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Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
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Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
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Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Lumen will report third quarter 2024 results on November 5, 2024.
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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