Diamondback (FANG.US): The Permian Basin will become America's largest gas producer in the 2030s

The Zhitong Finance App learned that Diamondback Energy (FANG.US) said that as the location of the most productive oil field in the US, the Permian Basin will also become the largest natural gas producing region in the US sometime in the 2030s.

One of the largest drillers in the West Texas and New Mexico oil-producing regions, is preparing for gas growth. Diamondback Energy CEO Kaes Van't Hof wrote in a letter to investors on Monday that the company is building relationships with liquefied natural gas (LNG) companies and hopes to sign future supply agreements.

“At the highest level, the gas theme in the Permian Basin has moved from being supply-driven to demand-driven.” He wrote, “As we've said many times, the Permian Basin hasn't really tried to produce gas.”

This is Diamondback's strongest statement on gas growth to date. Due to its huge business in the Permian Basin, the company is regarded as a representative company in the US shale industry, and the Permian Basin has always been the engine of American oil expansion.

Diamondback's view means that the Permian Basin will surpass Marcellus Shale (Marcellus Shale) and become the largest producer of shale gas. This echoes Citigroup analysts' August predictions. The Marcellus Shale, which spans Pennsylvania, West Virginia, and Ohio, has been the largest natural gas producing basin in the US since 2012, according to the US Energy Information Administration (EIA).

The boom in gas supply in the Permian Basin helped developers secure significant funding to build a series of new giant pipelines. These pipelines deliver West Texas gas to emerging demand centers across Texas, including East Texas population growth areas, data center hubs near the Panhandle region, and new LNG export terminals along the Gulf Coast.

Van't Hof wrote that as the Permian Basin matures, the ratio of gas to oil production will continue to rise. He also said that if the company's natural gas resources are considered along with surface land and extracted water, the company also has the key elements required for data centers.

Van't Hof said that Diamondback's production has increased more than 330 times since 2012. “This growth rate is comparable to the technology industry, and the technology industry is naturally blending with our industry.”