Energy Transfer Announces $5.3 Billion Transwestern Pipeline Expansion to Boost Natural Gas Deliveries from Permian to Southwest

Energy Transfer LP has unveiled plans for a major $5.3 billion expansion of its Transwestern Pipeline system, designed to deliver increased volumes of natural gas from the prolific Permian Basin to growing demand centers in Arizona and New Mexico. The project, announced on August 6, 2025, represents a significant investment in long-term energy infrastructure to serve a region experiencing rapid population growth, tech sector expansion, and rising power demand.

Known as the Desert Southwest Expansion, the project will add 516 miles of new 42-inch pipeline and nine new compressor stations, stretching across Texas, New Mexico, and Arizona. Upon completion, the system will be capable of transporting up to 1.5 billion cubic feet per day (Bcf/d) of natural gas, reinforcing the company’s position as a critical supplier of reliable, affordable energy to the U.S. Southwest.

Energy Transfer emphasized that the expansion is supported by substantial long-term commitments from investment-grade counterparties, reflecting strong market confidence in the project. The company plans to hold an open season later this quarter to secure additional shipping commitments and expects remaining capacity to be fully subscribed. Future expansions are also under consideration, depending on open season results.

The new pipeline segment is scheduled to enter service in the fourth quarter of 2029. As part of the investment, the project includes approximately $600 million in Allowance for Funds Used During Construction (AFUDC). Construction will rely heavily on domestic steel and is expected to create up to 5,000 jobs, including union positions—highlighting the project’s broader economic impact.

Transwestern has been a key piece of energy infrastructure in the region since it first began operations in 1960. This latest expansion aligns with Energy Transfer’s strategy of leveraging its nationwide pipeline footprint—which connects to nearly 200 natural gas-fired power plants—to optimize asset performance and support the evolving needs of utilities and industrial users.

With natural gas demand in the Desert Southwest continuing to rise due to urban development and increased electrification, the Transwestern expansion stands to play a pivotal role in securing regional energy reliability for decades to come.