Energy Transfer approves $5.3 billion pipeline expansion to southwestern US

Energy Transfer LP (NYSE: ET) announced it reached a positive financial investment decision for a $5.3 billion expansion of its Transwestern Pipeline system to increase natural gas supply to Arizona and New Mexico markets from the Permian Basin.

The Desert Southwest pipeline expansion project includes 516 miles of 42-inch pipeline and nine compressor stations across Arizona, New Mexico and Texas. The system will have a design capacity of 1.5 billion cubic feet per day and is expected to begin operations in the fourth quarter of 2029.

The project cost includes $600 million in Allowance for Funds Used During Construction. Energy Transfer stated the expansion is supported by long-term commitments from investment-grade customers and plans to launch an open season later this quarter for remaining capacity.

The company expects to employ up to 5,000 local workers and union construction jobs during the building phase. The project will prioritize U.S. steel pipe manufacturers, according to the announcement.

The expansion extends Energy Transfer's existing Transwestern natural gas pipeline network, which has operated in the region since 1960. The company cited population growth, high-tech industry demand and data center expansion as drivers for increased energy needs in the southwestern United States.

Energy Transfer operates approximately 140,000 miles of pipeline and energy infrastructure across 44 states. The Dallas-based company's assets span major U.S. production basins and connect to nearly 200 natural gas-fired power plants nationwide.

The information was disclosed in a company press release statement.

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