Energy Transfer OKs $1.6bn gas pipeline

Energy Transfer LP has formally committed to build the South Mississippi Pipeline, a natural gas project with an expected cost of about $1.6 billion. The pipeline is designed to transport natural gas from eastern Louisiana across Mississippi, responding to rising demand linked to data centers and export terminals. The project has reached a positive final investment decision, supported by long-term, demand-based transportation agreements that underpin construction.

The South Mississippi Pipeline will extend approximately 215 miles, or 346 kilometers, and is planned as a 36-inch line. It is expected to have capacity to ship about 1.2 billion cubic feet of gas per day. When it enters service, projected in 2030, the line is intended to provide shippers with greater access to natural gas sourced from multiple basins across the Southeastern United States.

Energy Transfer expects to operate the South Mississippi Pipeline and to hold a 51% ownership stake in the project. The remaining ownership interest is expected to be held by customers shipping gas on the system. These arrangements align the interests of the operator and shippers through shared participation in the asset.

A binding open season is currently under way to solicit additional transportation commitments from potential customers. Final sizing and capacity of the pipeline will be determined after the open season concludes, although the project is currently planned around 1.2 billion cubic feet per day of capacity. Long-term firm transportation agreements already secured provide a contractual underpinning for the buildout.

Alongside the South Mississippi Pipeline decision, Energy Transfer has been expanding its broader natural gas transportation network. The partnership completed additional compression and meter facilities on its Rover Pipeline system to support a 15-year transportation agreement with a Marcellus producer. This agreement added 250,000 MMBtu per day of firm transportation commitments, which commenced on November 1.

Energy Transfer also executed two agreements to deliver a total of 150,000 MMBtu per day of firm natural gas transportation from its MRT Pipeline to two power plants under construction in Missouri. To meet these obligations, the partnership will add pipeline and metering facilities. These contracts, together with the South Mississippi Pipeline project, reflect ongoing growth in demand-based gas transportation services across multiple U.S. regions.

Energy Transfer owns and operates one of the largest and most diversified portfolios of energy infrastructure in the United States, including approximately 140,000 miles of pipelines. Its network spans 44 states with assets in all major U.S. production basins. Recent increases in transported gas volumes on its Texas intrastate pipelines have been driven in part by new third-party transportation contracts tied to the recently in-service Hugh Brinson Pipeline and related assets.

The South Mississippi Pipeline project adds another large-scale asset to this network at a time when natural gas usage is being reinforced by growth in data centers, export facilities and power generation needs. The project’s cost, capacity and long-term contract backing position it as a significant component of Energy Transfer’s future gas transportation portfolio.