Midstream Companies Scale Up Natural Gas Infrastructure Amid Permian Growth
Midstream companies are expanding their natural gas infrastructure to accommodate rising production in the Permian Basin, driven by the increasing gassiness of oil production. The arrival of new pipeline capacity is alleviating constraints in the region, with over 15 billion cubic feet per day (Bcf/d) of new takeaway capacity expected by 2030.
Midstream operators are sanctioning new gas processing plants and gathering systems to meet the growing demand for natural gas and NGLs. For example, Enterprise Products Partners announced a new 300-MMcf/d gas processing plant in the Delaware Basin and a 150 thousand barrel per day (MBpd) NGL fractionator at Mont Belvieu.
The growth of Permian production is also driving demand for LNG exports, with surging electricity needs for data centers and power generation facilities supporting new projects. Enbridge and MPLX have sanctioned the joint venture Bay Runner Twin Pipeline to supply natural gas to NEXT's Rio Grande LNG facility under long-term take-or-pay agreements.
The collective project backlogs for six midstream companies with significant natural gas infrastructure now exceed $160 billion, providing multi-year visibility for fee-based EBITDA growth. This is driven by the increasing demand for natural gas and NGLs, as well as the growth of LNG exports.