Summit Midstream (SMC) is moving forward with a 900 MMcf/d compression expansion of the Double E Pipeline in the Permian Basin. The project helps address a ‘missing link’ in the rapid buildout of Permian natural gas infrastructure: connecting the field to the Waha hub.
On Aug. 31, Summit announced that Double E had concluded a successful open season and reached a final investment decision (FID) on the project. In the open season, Double E secured ~550 MMcf/d of binding long-term commitments to Waha, bringing total contracted firm capacity on the pipe to ~2.2 Bcf/d. SMC said it was also in “advance discussions with multiple shippers” for the remaining 450 MMcf/d of capacity.
Double E stretches 135 miles from Eddy County, NM in the northern Delaware to the Waha hub. Under the project, SMC will install a bidirectional mainline compressor station on Double E, increasing the forward-haul capacity to Waha by ~900 MMcf/d. SMC expects an in-service date in 4Q28. The project will cost ~$100MM, net to Summit’s 70% interest.
East Daley Analytics has highlighted that the rapid expansion underway in Permian gas midstream had a potential Achilles’ heel: the lack of investment in pipe from the field to the Waha hub. Multiple egress pipelines are moving forward, and there is plenty of new gas processing planned. But there have been fewer developments targeting intrabasin pipes to move residue gas from G&P systems to Waha.
We estimate projects for only ~1.7 Bcf/d of incremental intrabasin pipeline capacity are currently planned, creating a meaningful shortfall between processing growth and connectivity. The Double E expansion will play a key role in filling this gap.
EDA currently forecasts US natural gas demand will increase by ~22 Bcf/d over the next five years, driven by LNG exports and new power demand for data centers. Meeting this growth will require substantial supply additions, including an expected 8 Bcf/d from the Permian Basin through 2031. All pieces of the midstream chain, including projects like Double E’s, will be needed for the growth ahead.
Double E is positioned to ride other trends, including growing data center development within the Permian. The start of bidirectional services targets new demand from regional data centers, evolving Double E into a 2.4 Bcf/d hub connector rather than just a Waha-bound pipe.
As part of this effort, Summit said it targeting more egress pipeline connections for Double E. The strategic upside for SMC and Double E comes from using the new interconnects to meet in-basin demand and provide more optionality to move gas to different markets. – Alec Gravelle Tickers: SMC.
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