Kinder Morgan’s (KMI) Natural Gas Pipeline Co. of America (NGPL) will move forward with the Permian Link project, adding northbound takeaway from the Permian Basin to meet new data center demand.
In its 3Q26 earnings update, KMI announced a final investment decision (FID) on NGPL’s Permian Link, a 434-mile, 2.8 Bcf/d pipeline from the Pecos County area of the Permian to the Texas Panhandle. An unnamed “A-rated hyperscaler” anchors the $4.2B project on 20-year take-or-pay contracts, KMI said. NGPL is targeting an in-service date in 3Q30.
KMI owns 37.5% of NGPL (ArcLight holds 62.5%), so its share of capital is about $1.6B. PermianLink’s capacity grew from 2.6 Bcf/d offered in an open season in May to 2.8 Bcf/d at FID. In the open season, NGPL also offered southbound capacity from its Midcontinent zone, from as far east as Beckam County, OK to supplement the new Permian egress. Management said adding shippers and compression would raise returns further.
The project represents new demand pull from the Permian and potentially stronger Waha hub prices, a reality reflected in regional spreads. Futures price NGPL Midcon only $0.35/MMBtu over Waha in 2030, below the $0.65–0.85 indicative transportation rate in NGPL’s May 2026 open season (see figure at right). The forward spread alone wouldn’t justify the transportation cost for a producer-led project.
Route Suggests Potential Data Center Backers
KMI has not named the anchor for PermianLink, but the proposed route passes near some of the largest data center projects that East Daley Analytics tracks in Energy Data Studio.
At the north end, the pipeline runs within ~10 miles of Fermi America’s 17 GW Project Matador in Carson County, TX, based on the project map provided in the open season. Project Matador represents ~2.7 Bcf/d of gas-equivalent demand, nearly matching Permian Link’s capacity, though Fermi has already signed a supply agreement with Energy Transfer (ET) to feed the data center. PermianLink also passes near Crusoe/Google’s Goodnight campus in Armstrong County in the Texas Panhandle, where developers have filed a permit for a 933 MW gas plant.
On the south end, AWS’ GW Ranch project is sited roughly 11 miles from the Pecos County receipt point, which NGPL also identified for potential southbound deliveries.
For producers, Permian Link creates another potential outlet for Permian gas, even as East Daley forecasts northbound existing takeaway capacity at only 75% utilization in 2030. The project should support Waha prices, although the impact depends on incremental demand vs displacement of flows on existing pipelines.
The anchor customer is paying for reliability, not cheap gas. Waha futures plus the indicative rate and fuel put 2030 delivered gas at $3.64–3.87/MMBtu before usage charges. That is roughly parity with Henry Hub and $0.32–0.55 above the Panhandle hub.
While the anchor remains unidentified, the concentration of proposed data center demand along the route highlights the growing role of power generation in shaping Permian gas infrastructure investment. – Alec Gravelle Tickers: ET, KMI.
Data Center Headwinds – Could They Ripple Through Energy Infrastructure?
Data centers are driving expectations for major new power generation projects — but what if projects are delayed? The effects could reach far beyond the data center sector.
Join East Daley on Wednesday, Nov. 18 at 10 am MT for a look at how data center headwinds and power generation needs could reshape energy infrastructure and production.
We’ll explore:
- Power demand and project timing: What could delay data center buildouts, and would that affect expected demand for new generation?
- Natural gas infrastructure: Could delays put natural gas projects at risk where data centers and power utilities are the main downstream customers — especially projects already at FID or still in wait?
- Cross-commodity spillovers: If gas demand growth is pushed out, what does that mean for midstream crude and NGL project growth — and for overall hydrocarbon production?
Delays in data center and power project development could ripple through the infrastructure pipeline, changing the timing and scale of investment across multiple commodity markets.
Reserve your spot now to join the discussion.
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