Energy Transfer LP is moving forward with plans to build a $5.3 billion natural gas pipeline.
The pipeline will span over 500 miles of 42-inch pipe, with a daily capacity of 1.5 billion cubic feet. It will include nine compressor stations across Arizona, New Mexico, and Texas. Energy Transfer has secured shipping commitments from several companies, though their identities were not disclosed. This development could impact a competing proposal by Kinder Morgan Inc. for a similar route, with Kinder Morgan’s stock dropping 4.6% on the S&P 500 Energy Index, while Energy Transfer’s shares rose 1.8% to $18.06 by 10:01 a.m. in New York.
The Permian Basin’s shale drilling boom has significantly increased crude oil production, but it has also led to an oversupply of associated natural gas. This surplus has occasionally driven local gas prices to negative values due to insufficient pipeline infrastructure. Energy Transfer’s project aims to address this bottleneck, enabling producers to transport gas more efficiently to regional markets.
A company representative stated: “This expansion of the Transwestern Pipeline network will provide critical infrastructure to support Permian Basin producers and meet growing energy demands in New Mexico and Arizona.” The project is designed to enhance the region’s energy supply chain, ensuring reliable access to natural gas for various industries.
The initiative reflects Energy Transfer’s commitment to addressing infrastructure challenges in the Permian Basin while supporting economic growth in the affected states. By facilitating the transport of natural gas, the pipeline will help stabilize supply and meet market needs, contributing to energy reliability in the region. The project’s progress will involve close coordination with stakeholders to ensure timely completion and operational success.
