Diamondback (FANG.US): Permian Basin will become the largest natural gas producing region in the United States by the 2030s

According to Jinse Finance, Diamondback Energy (FANG.US) stated that as the location of the highest oil production fields in the United States, the Permian Basin is also set to become America’s largest natural gas producing region sometime during the 2030s.

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

“At the highest level, the natural gas theme in the Permian Basin has shifted from supply-driven to demand-driven,” he wrote. “As we have said many times, the Permian Basin has not yet really tried to produce natural gas.”

This is Diamondback’s strongest statement to date on natural gas growth. Due to its extensive operations in the Permian Basin, the company is regarded as a representative of the U.S. shale industry, and the Permian Basin has consistently been the engine for America’s oil expansion.

Diamondback’s view implies that the Permian Basin will surpass the Marcellus Shale to become the largest shale gas producing region. This view echoes the forecast from Citigroup analysts in August. According to data from the U.S. Energy Information Administration (EIA), the Marcellus Shale, spanning Pennsylvania, West Virginia, and Ohio, has been the nation’s largest natural gas production basin since 2012.

The booming natural gas supply from the Permian Basin has enabled developers to secure massive funds to build a series of new giant pipelines. These pipelines deliver West Texas natural gas to emerging demand centers across Texas, including rapidly growing population areas in East Texas, 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 production ratio of natural gas to oil will continue to rise. He also stated that if the company’s natural gas resources are considered together with surface land and produced water, the company possesses the key elements required by data centers.

Van’t Hof stated that since 2012, Diamondback’s production has grown more than 330-fold, “a growth rate that can rival the technology industry, which is naturally converging with our own sector.”