Energy companies have drilled so many new wells into the Permian Basin in recent years that it has unleashed a torrent of oil and gas supplies. This gusher has overwhelmed the region's infrastructure, which pushed down prices.
Natural gas has been especially hard hit, with prices at two regional hubs falling into negative territory earlier this year. Because of that, many producers chose to flare their natural gas output as opposed to selling it at a loss. At one point, they were burning off enough gas to power every home in the state of Texas.
Pipeline companies like Kinder Morgan (NYSE: KMI), however, have been racing to solve this problem by building new infrastructure. The company recently brought the much-needed Gulf Coast Express Pipeline (GCX) online slightly ahead of schedule. That project will provide a welcome boost for oil and gas producers in the region as well as its developers.
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Source: Motley Fool
(September 25, 2019 - 6:02 PM EDT)
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