May 2025, Vol. 252, No. 5
Features
U.S. Midstream Report: Natural Gas Pipeline Growth Drives 2025 Optimism
By Michael Reed, Editor-in-Chief
With a strong focus on natural gas infrastructure, especially that designed to ease bottlenecks and bolster the still growing demand for LNG exports, midstream moves toward the second half of 2025 with a fairly positive outlook.
Overall, while new large-scale crude oil pipeline projects continue seem unlikely this year, several major natural gas pipelines are under construction or nearing completion and, on the whole, activity is up compared to previous years. This is still especially true in in the Permian and Haynesville basins.
Notable among these gas projects are the 3.5 Bcf/d Black Fin and the 1.8 Bcf/d Louisiana Gateway pipeline, both expected in service in the fourth quarter.
A final investment decision has yet to be made on the potential Saguaro Connector Pipeline project, with Mexico Pacific working to complete project financing for its facilities in the jurisdictional territory of Mexico.
And, while there are no major greenfield crude oil pipeline awaiting announcement in 2025, there is a focus on augmenting and expanding existing infrastructure.
With federal support for midstream on the rise, permitting and legal risks remain significant for projects linked to LNG exports and those located in regions with a history of environmental advocacy activities. This is especially true in the Marcellus and Utica, where ongoing bottlenecks have restricted increased production for years.
That said, analysts and midstream insiders have been expressing a modestly positive outlook of the second half, based on predicted steady growth and the robust use of assets.
Still, the sector, which is historically conservative, will be weighing the potential high cost of legal challenges to its potential projects. If the changes to the approvals process are not handled carefully it could leave companies vulnerable to court challenges.
There is also the realization that market demand over the long haul is what really drives construction of midstream projects.
Right Direction
One of the good omens from early in 2025 came in the form of the reinstatement of the certificate for Williams Companies’ Transcontinental Gas Pipe Line (Transco) in January, which in effect gave the go-ahead to the company’s Regional Energy Access (REA) expansion project, which is designed to ease supply constraints in in Pennsylvania, New Jersey and Maryland.
Another sign things were heading in the right direction for midstream came when new U.S. Interior Secretary Doug Burgum announced plans to open up more acreage for oil and gas leasing. This came with assurances that restrictions on construction of an LNG pipeline would be lifted.
Burgum said in March that Interior plans to reopen the 82% of Alaska’s National Petroleum Reserve that is available for leasing for development and reopen the 1.56-million-acre Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing.
Additionally, he said the administration would revoke restrictions on land along the Trans-Alaska Pipeline Corridor and Dalton Highway north of the Yukon River and convey the land to the State of Alaska, paving the way for the proposed Ambler Road and the Alaska Liquefied Natural Gas Pipeline project.
In late 2024, Oneok completed the 125,000-bpd MB-6 NGL fractionator in Mont Belvieu, Texas, and the full looping of its West Texas NGL Pipeline system. The effort boosted the company’s fractionation capacity to more than 1 MMbpd, increasing the ability to serve a growing market.
Completion of the full looping of the West Texas NGL Pipeline system expanded capacity to 515,000 bpd. Additional pump stations, which are expected to be completed in mid-2025, will further increase system capacity to 740,000 bpd.
U.S. Globally
Overall, it comes as little surprise to those in midstream that during the past few years, and on into the near-future, we will continue to see LNG initiatives garner the bulk of the attention worldwide. Still, one must keep in mind that LNG terminal construction drives new pipeline construction, as well.
While this is increasingly true in Europe, where new pipelines are being developed to support new entry-points for gas, it’s also true in the United States, where new pipelines are needed to supply the liquefaction plants on the other side of the LNG supply chain. As LNG infrastructure continues to develop, pipeline construction will grow with it.
When we talk about pipeline construction in the United States, all eyes correctly turn toward the Permian and Haynesville basins where Gulf Coast LNG exportation drives new projects in Texas and Louisiana.
While most of the Permian Basin natural gas pipelines built in recent years have targeted LNG export markets south of the Houston area, two proposed intrastate projects have emerged within the last couple of years that will deliver Permian Basin gas to the Texas-Louisiana border region.
Natural gas pipeline capacity in the Permian Basin also is set to grow with the start of the Matterhorn Express Pipeline during the fourth quarter.
The pipeline, backed by EnLink Midstream and other stakeholders, will add 2.5 Bcf/d of takeaway capacity, transporting gas from the Permian to near Houston, Texas.
Matterhorn, a joint venture involving Whitewater, EnLink Midstream, Devon Energy, and MPLX, began easing the bottleneck in natural gas transportation from the Permian in late 2024, where production has more than doubled since 2018. This ongoing surge has been driven mainly by associated gas from oil operations.
Beyond Matterhorn, three additional pipeline projects are underway, totaling 7.3 Bcf/d in new capacity:
- Apex Pipeline (2 Bcf/d): Expected to enter service in 2026, it will transport gas from the Permian to Port Arthur, Texas, operated by Targa Resources.
- Blackcomb Pipeline (2.5 Bcf/d): Set to connect Permian gas to Agua Dulce in south Texas by 2026, operated by Whitewater Midstream.
Other announced projects could add 7 Bcf/d of capacity between 2025 and 2028, targeting markets in Mexico and along the Texas Gulf Coast.
U.S. Haynesville
Background: Historically, as a predominantly dry gas basin, activity in the Haynesville shale has been limited by low natural gas prices. However, its fortunes were reversed when higher prices and ever-increasing demand forecasts were tied to nearby LNG plants.
Several natural gas pipeline projects are in-development to connect Haynesville gas producers to Gulf Coast LNG exporters.
Momentum Midstream’s New Generation Gas Gathering (NG3) project, is under construction and expected to be fully operation in the fourth quarter. It runs from the Haynesville to coastal Louisiana LNG markets, with 275 miles of additional natural gas gathering pipelines with 2.2 Bcf/d of capacity.
U.S. Expectations:
Significant planned or proposed pipeline mileage is expected to start construction over the next three years in the United States. This should be bolstered by the Republican victory in Washington, D.C.
However, 86% of projects are concentrated in the South Central region of the country, largely in Texas and Louisiana, and that will likely be the case in coming years. The bulk of these projects are associated with a single source of demand, LNG export terminals along the Gulf Coast.
The U.S. currently has about 90 mtpa of LNG export capacity, with an additional 80 mtpa under construction.
141 mtpa of new capacity is considered planned and an additional 115 mtpa has been proposed.
Nearly all this new capacity will continue to be located on the U.S. Gulf Coast, and to supply it, many large pipeline projects, connecting production in the Haynesville and Permian to the coast.
These include the Louisiana Energy Access Pipeline, the Permian Highway and the NG3 project. Further LNG export capacity FIDs will drive additional pipelines, such as the Apex and Warrior pipelines, to start construction.
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