Transwestern Pipeline Opens Bidding Season for Southwestern Expansion Project

A subsidiary of Energy Transfer, the Transwestern Pipeline Co. (Transwestern), launched a binding open season for a planned pipeline expansion in the Desert Southwest. The expansion will take place in Texas, New Mexico, and Arizona, transporting natural gas supplies from the Permian Basin to markets in the United States’ southwestern region. Transwestern’s open bidding season ends on October 25, 2025.

The Desert Southwest expansion project combines new large-diameter pipeline, compression, and metering facilities to transport a minimum of 1.5 bcf/day of natural gas from numerous receiving points in the Permian Basin. From these offtake points, natural gas will be delivered to new and existing locations in New Mexico and Arizona.

Compressor station on pipeline | Image Credit: University of Maryland

Project benefits include supply reliability, as southwestern markets will have increased access to Permian natural gas supplies. Rates and services are designed specifically for local distribution companies, power generators, and data centers, ensuring delivery flexibility. Transwestern will execute modifications to its existing Phoenix Lateral, installing bi-directional capabilities.

The company already secured sufficient binding commitments for the project, with additional commitments submitted for the recently announced open season. These specific bids will help determine the optimal size and design of the project. Pending necessary regulatory approvals, permits, and other authorizations from the Federal Energy Regulatory Commission, the company expects project capacity to be available by Q4 2029.

Lake Charles LNG

In late December 2024, Energy Transfer LNG Export signed a 20-year LNG sale and purchase agreement (SPA) with Chevron U.S.A., supplying 2 MTPA from its Lake Charles LNG project. The SPA is subject to a final investment decision and other customary closing conditions:

• LNG is supplied on a free-on-board basis
• Purchase price features a fixed liquefaction charge
• The gas supply component is indexed to the Henry Hub benchmark

Energy Transfer’s Lake Charles LNG export facility will be built on a current brownfield regasification site that contains four LNG storage tanks, two deep-water berths, and additional LNG infrastructure, with connections to the company’s Trunkline pipeline system to divert LNG to intra- and interstate pipelines. These connections permit access to numerous natural gas-producing basins: Haynesville, Permian, and the Marcellus Shale.

Energy Transfer & Sunoco

In July 2024, Energy Transfer and Sunoco entered a joint venture to combine respective crude oil and produced water-gathering assets in the Permian Basin. Energy Transfer will operate the joint venture and add its Permian crude oil and water gathering assets and operations, while Sunoco will contribute its crude oil gathering assets.

Energy Transfer’s long-haul crude pipeline network—excluded from the joint venture—transports crude oil from the Permian Basin to Nederland, Houston, and Cushing. The joint venture will operate more than 5,000 miles of crude oil and water gathering pipelines with a crude oil storage capacity over 11 million barrels. Sunoco will hold a 32.5% interest and Energy Transfer will hold a 67.5% interest in the joint venture.