Energy Transfer upsizes Desert Southwest pipeline, boosting capacity

Energy Transfer said it will increase the size of its Desert Southwest pipeline expansion before construction begins, raising the mainline diameter to 48 inches from 42 inches. The company said the change could lift capacity to as much as 2.3 billion cubic feet per day, depending on the final compression configuration, to move Permian Basin natural gas to existing and new delivery points in New Mexico and Arizona.

The company now expects the project to cost about $5.6 billion, while keeping the targeted in-service date in the fourth quarter of 2029. Analysts cited in the report pointed to growing natural gas demand in the Desert Southwest tied to population growth, potential coal-to-gas power plant shifts, and rising electricity needs from data centers—estimating that announced Arizona data center load by 2032 could require up to 950 million cubic feet per day of additional gas supply. The report also noted the route was not described as changing and that Energy Transfer has secured pipe delivery commitments from U.S. manufacturers for late 2027.