Natural gas prices in West Texas have fallen to their lowest point in nearly 14 months, even dipping below zero recently. This unusual drop is tied to pipeline maintenance in the area, which has limited the flow of gas and caused a buildup of supply.
At the Waha hub, a key center for gas trading in the Permian region, prices for next-day delivery stayed negative on Monday, though they improved slightly from last week’s low. On Friday, prices hit about negative $3.03 per million British thermal units, a level not seen since November 2024.
The drop comes after Kinder Morgan paused parts of its El Paso and GCX pipelines for repairs. Their Permian Highway pipeline is also set for maintenance next month. This ongoing work has created bottlenecks, restricting how much gas can move through the system.
The Permian Basin is producing more gas than ever. But because demand is focused far away—around the Gulf Coast and Southern California—producers rely heavily on pipelines to get their gas to market. With limited pipeline capacity, the extra gas has nowhere to go.
At the same time, U.S. liquefied natural gas exports have hit record levels thanks to new facilities like Plaquemines in Louisiana. Still, pipeline issues in Texas mean some regions see an oversupply, while places like Haynesville Basin in Louisiana can easily send gas to export plants near the Gulf.
Right now, demand for natural gas in West Texas is low due to the season, and production remains strong. This combination is pushing prices into negative territory, which means some producers are actually paying buyers to take gas off their hands.
Kinder Morgan declined to comment beyond the official notices posted about their pipeline work. Meanwhile, the gas market in West Texas is adjusting to these challenges as production outpaces the ability to move supply to where it’s needed most.