Energy Transfer LP announced on August 6 the expansion of its Transwestern Pipeline that will supply natural gas from the Permian Basin to New Mexico and Arizona. The expansion will help meet rising natural gas demand for power generation driven by population growth and data centers. The company also reported second quarter results on August 6.
Expanding Westward from the Permian Basin
The Transwestern Desert Southwest Pipeline Expansion will cost an estimated $5.3 billion and span 516 miles across Texas, New Mexico, and Arizona. It will have the capacity to transport up to 1.5 billion cubic feet per day (Bcf/d) of natural gas. In the earnings call, Mackie McCrea, co-CEO of Energy Transfer, estimated at least mid-teen returns for the pipeline once completed.
Although backed by long-term commitments from investment-grade customers, an open season was also announced for this quarter to gauge additional interest from shippers. Energy Transfer currently anticipates capacity selling out for the Transwestern Desert Southwest pipeline by the end of open season. Should further demand become apparent, the Partnership is prepared for additional expansion. On the earnings call, McCrea revealed that the Partnership is currently evaluating increasing the pipe’s diameter to more than double the designed capacity.
See also: Energy Transfer Strikes Deal With Data Center for Natural Gas Supply
The Arizona expansion is expected to come online by the fourth quarter of 2029. It will help support U.S. steel manufacturers and meet growing energy demands from the proliferation of data centers.
A Breakdown of Energy Transfer’s Q2 Results
In an earnings release after market close on August 6, Energy Transfer reported Q2 adjusted EBITDA of $3.87 billion, which was generally in line with consensus expectations. ET expects full-year 2025 adjusted EBITDA to come in at or slightly below the lower end of provided guidance of $16.1 to $16.5 billion.
Gathered volumes for midstream gained 10% YoY, setting a new record for the Partnership. Natural gas liquids (NGLs) as well as crude oil transportation volumes also set new records. Exports of NGLs logged record highs as well.
Alongside the Arizona expansion, the Partnership also reported Final Investment Decision (FID) on Phase II of the Hugh Brinson Pipeline. A bi-directional pipeline, the Hugh Brinson connects the Midland Basin of the Permian to infrastructure south of Dallas. West to east the pipeline will have a transportation capacity of 2.2 Bcf/d while east to west its capacity will be 1Bcf/d. The Partnership also reached FID on a new storage cavern at its Bethel natural gas storage facility. The addition of the storage will double capacity at the facility to more than 12 Bcf.
2 Ways to Gain Energy Transfer Portfolio Exposure
Energy Transfer is a top holding in the Alerian MLP ETF (AMLP ) and Alerian Energy Infrastructure ETF (ENFR ) as of August 6, 2025.
AMLP delivers exposure to the Alerian MLP Infrastructure Index (AMZI), which is a capped, float-adjusted, capitalization-weighted composite of energy infrastructure MLPs. ENFR tracks the Alerian Midstream Energy Select Index (AMEI), an index containing energy infrastructure MLPs and corporations within North America.
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