MPLX LP plans to launch Secretariat I and II natural gas processing plants in the Permian Basin, adding 500 million cubic feet per day (MMcf/d) of capacity between late 2026 and 2028. The expansion comes as U.S. shale production reshapes global gas markets, with American exports now competing directly with Russian pipeline gas and Qatari LNG.
The Permian Basin produced 22 billion cubic feet per day in late 2024, representing one-fifth of total U.S. output. Associated gas from oil drilling has outpaced pipeline capacity, creating regional price discounts of $1-2 per million BTU below the Henry Hub benchmark—a pattern seen in other landlocked production zones from Kazakhstan to Australia's Cooper Basin.
Natural gas prices face downward pressure globally. Henry Hub futures traded near $3.50 per million BTU in early 2026, down from above $9 in 2022. European TTF prices followed similar declines as LNG supply growth outstripped demand. New U.S. processing capacity entering oversupplied markets may limit price recovery through 2028.
MPLX, Marathon Petroleum's midstream arm, operates gathering, processing, and pipeline assets across major U.S. shale plays. The company reported $2.8 billion in operating revenue for Q3 2024, with gathering and processing generating 40% of segment income. The Secretariat plants will extract natural gas liquids including ethane, propane, and butane—commodities that also face weak international pricing.
Propane averaged $0.80 per gallon in early 2026 versus $1.20 in 2022, reflecting global oversupply as U.S., Middle Eastern, and Russian producers compete for Asian and European market share. Midstream companies face margin pressure as percentage-of-proceeds contracts expose them to commodity volatility, while fixed-fee arrangements provide stability for only 60% of MPLX's processing contracts.
The 2026-2028 timeline assumes regulatory approvals and construction stay on schedule. Supply chain delays have pushed similar projects back 6-12 months globally. Demand growth from U.S. LNG exports to Europe and Asia will determine whether new capacity tightens regional markets or adds to global oversupply pressures.